Various QTL mapping experiments led to the detection of a QTL in the centromeric region of cattle chromosome 14 that had a major effect on the fat content of milk. Recently, the gene encoding diacylglycerol O-acyltransferase (DGAT1) was proposed to be a positional and functional candidate for this trait. This study investigated the effects of a nonconservative lysine to alanine (K232A) substitution in DGAT1, which very likely represents the causal mutation, on milk production traits. Existing granddaughter designs for Fleckvieh and German Holstein, the two major dairy/dual-purpose breeds in Germany, were used to estimate allele frequencies and gene substitution effects for milk, fat, and protein yield, as well as fat and protein content. A restriction fragment length polymorphism assay was applied to diagnose the K232A substitution in DGAT1. Estimates of the allele frequencies for the lysine-encoding variant were based on maternally inherited alleles in sons and amounted to 0.072 for Fleckvieh and 0.548 for German Holstein. Effects of DGAT1 variants on content traits were pronounced; estimates of the gene substitution effect for the lysine-encoding variant were 0.35 and 0.28% for fat content and 0.10 and 0.06% for protein content in Fleckvieh and German Holstein, respectively. Conversely, negative effects of the lysine variant of -242 to -180 kg for Fleckvieh and -260 to -320 kg for German Holstein were revealed for milk yield from first to third lactation, resulting in enhanced fat yield of 7.5 to 14.8 kg in Fleckvieh and 7.6 to 10.7 kg in German Holstein. For protein yield, however, mainly negative effects of -3.6 to 0.2 kg in Fleckvieh and -4.8 to -5.2 kg in German Holstein were observed. Pearson correlations between residuals of milk yield and content traits were decreased when omitting DGAT1 effects in the analysis, thereby indicating that DGAT1 contributes to negative correlations between these traits. Molecular tests allow for the direct selection among variants; however, the benefits of the alternative alleles depend on economic weights given to the different milk production traits in the breeding goal.