The objective of this work was to evaluate the effects of breed and heterosis on the estimates of genetic parameters of 305-day milk yield (305MY), by fitting milk yield data to the Wood, Mixed Log, Morgan, and Wilmink non-linear models. A total of 258,891 test-day milk yield records of 37,965 Holstein (H), Gyr (G), and Girolando (1/2 H, 1/4 H, 3/4 H, 3/8 H, 5/8 H and 7/8 H genetic groups) cows from 1840 herds were collected in the state of Minas Gerais, Brazil, in the period of 1998 to 2014. The pedigree file included 36,640 animals, 3677 bulls and 24,472 cows. The genetic parameters were obtained by one-character analysis using the AIREMLF90 software. The heritability estimates of 305MY, and of 305MY fitted to the different nonlinear models ranged from 0.14 to 0.20. Most genetic groups had heterosis effect, with the greatest effects for 305MY on 1/2 H (1/2 Holstein  1/2 Gyr) cows, presenting a milk yield of 1112.73 kg higher than the average of their parents. The results indicate that most genetic groups of Girolando present heterosis effect for 305MY estimated through nonlinear models, and the possibility of obtaining moderate genetic gains when these animals are subjected to selection procedures. HIGHLIGHTS The use Girolando cows in production systems in Brazil has shown positive results of production. This greater productive efficiency may be because of heterosis on the production and adaptation of these animals. The effect of breed and heterosis can be included in traditional models for the improvement of selection.