This study estimated the general and specific combining abilities and mean heterosis of tobacco lines of the varietal groups Flue-Cured Virginia (FCV) and Air-Cured Burley (BY). In addition, possible advantages and an improved strategy of using hybrids in tobacco breeding in the tropics were discussed. Ten BY and 13 FCV lines were crossed in a diallel mating design. The hybrids and parental lines were evaluated at two locations in Southern Brazil. The mean heterosis was 5.37% for FCV and zero for BY lines, although higher than 15% in some combinations. The occurrence of heterosis indicates dominance in the control of tobacco yield. Tobacco breeding programs must focus primarily on improving the performance of lines per se and then on the identification of the best hybrid by testing combinations.