A deterministic model was developed to evaluate the concurrent effects of selection and crossbreeding on the rate of genetic gain and productivity of New Zealand dairy cattle over 25 yr. Selection was based on an index, which included estimated breeding values for mature cow live weight and lactation yields of milk, fat, and protein. Mating strategies involving Holstein-Friesian, Jersey, and Ayrshire breeds were evaluated. Effects of heterosis and age were included to calculate live weight and yields of milk, fat, and protein per cow. Feed requirements were estimated for maintenance, lactation, and pregnancy and for replacement heifers. Stocking rate was calculated by assuming 12,000 kg of dry matter annually utilized per hectare. Upgrading to either Jersey or Holstein-Friesian increased the number of potential bull mothers and resulted in genetic gains of 0.27 genetic standard deviations/yr for both options. Rotational crossbreeding of Holstein-Friesian x Jersey decreased the number of potential bull mothers and resulted in a genetic gain of 0.24 genetic standard deviations/yr. Upgrading to Jersey resulted in the least increase in milk (5%) and the greatest increase in fat (16%) and protein (27%) per hectare with a small decrease in stocking rate (0.4%). Upgrading to Holstein-Friesian reduced the stocking rate by 11% and increased production of milk, fat, and protein per hectare by 10, 8, and 21%, respectively. Rotational crossbreeding of Holstein-Friesian x Jersey resulted in greater production per hectare than the intermediate production between upgrading to Jersey and upgrading to Holstein-Friesian. Crossbreeding can be used in combination with selection to exploit the effects of heterosis while maintaining genetic diversity to cover changes in market conditions.