This study assessed the accuracy and bias of genomic prediction (GP) in purebred Holstein (H) and Jersey (J) as well as crossbred (H and J) validation cows using different reference sets and prediction strategies. The reference sets were made up of different combinations of 36,695 H and J purebreds and crossbreds. Additionally, the effect of using different sets of marker genotypes on GP was studied (conventional panel: 50k, custom panel enriched with, or close to, causal mutations: XT_50k, and conventional high-density with a limited custom set: pruned HDnGBS). We also compared the use of genomic best linear unbiased prediction (GBLUP) and Bayesian (emBayesR) models, and the traits tested were milk, fat, and protein yields. On average, by including crossbred cows in the reference population, the prediction accuracies increased by 0.01–0.08 and were less biased (regression coefficient closer to 1 by 0.02–0.16), and the benefit was greater for crossbreds compared to purebreds. The accuracy of prediction increased by 0.02 using XT_50k compared to 50k genotypes without affecting the bias. Although using pruned HDnGBS instead of 50k also increased the prediction accuracy by about 0.02, it increased the bias for purebred predictions in emBayesR models. Generally, emBayesR outperformed GBLUP for prediction accuracy when using 50k or pruned HDnGBS genotypes, but the benefits diminished with XT_50k genotypes. Crossbred predictions derived from a joint pure H and J reference were similar in accuracy to crossbred predictions derived from the two separate purebred reference sets and combined proportional to breed composition. However, the latter approach was less biased by 0.13. Most interestingly, using an equalized breed reference instead of an H-dominated reference, on average, reduced the bias of prediction by 0.16–0.19 and increased the accuracy by 0.04 for crossbred and J cows, with a little change in the H accuracy. In conclusion, we observed improved genomic predictions for both crossbreds and purebreds by equalizing breed contributions in a mixed breed reference that included crossbred cows. Furthermore, we demonstrate, that compared to the conventional 50k or high-density panels, our customized set of 50k sequence markers improved or matched the prediction accuracy and reduced bias with both GBLUP and Bayesian models.