Variance components were estimated for herd, sire, and cow effects with a three-way nested model, using unadjusted and adjusted records for age and seasonal difference from 62 herds on DHIA recording in Puerto Rico. The cows calved from 1967 to 1973. They were high grade and purebred Holsteins imported from Canada or the United States or progeny of bulls and semen from the two countries. The percentages of the total variance for milk yield were 18.7, 4.9, and 40.8% for herd, sire, and cow, respectively. The percentages for fat yield were similar. These, plus the component for lactation length and days open, were in the range reported from temperate regions. The variance components of fat percent were similar to that of temperate regions for herd ( 14.9%) and cow (54.1%), but the sire component was negative, indicating factors yet unidentified that influenced this trait. Total variances for milk and fat yields indicated sufficient variability to permit selection. Estimates of heritability and repeatability for milk yield, fat yield, fat percent, lactation length, and days open computed from the sire and cow variance components were consistent with those reported from the temperate regions. The estimates indicate there was no loss of genotypic variance in the tropical environment. It appears that genotype exerts as much influence on production in Puerto Rico as elsewhere.