The objective of this study was on estimate variance components for milk and fat yields and to examine effect of milk production levels of herds to donor cow selection using a total of 10,264 records of cows(first lactation, 30S-day, mature equivalent) that freshened from 1985 to 1996. Herd groups were classified into low ($lt; 8,150㎏) and high ($gt; 9,100㎏) groups based on the average milk production levels of the herd, and the number of records of the low and high groups were 3,443 and 3,511, respectively. As variance components of the high group were greater than that of the low group, heterogeneity of variance existed in dairy herds. The heritabilities of tow and high groups for milk yield were ranged from 0.155∼0.167 and 0.259∼0.275, respectively. The proportion of selected donor cows in the high producing herds was appeared 4 times as large as in the low producing herds. And there were not significant differences among the models in solving heterogeneity problem between the herds.