The first estimates of the importance of epistatic effects within Eucalyptus globulus were obtained from analysis of clonally replicated full-sib progeny tests grown in Portugal. Parents comprised diverse selections from the Portuguese landrace. Variance components were estimated for 4-year-old diameter growth and pilodyn penetration, an indirect measure of wood density, both key traits in the pulpwood breeding objective. The experimental components of variance were used to estimate heritabilities and proportions of the phenotypic variance due to dominance and epistasis. The additive variance was the only significant genetic component affecting either diameter or pilodyn. Estimates of the additive, dominance and epistatic effects accounted for 8-10%, 0-4% and 0.4% of the phenotypic variance in diameter, and for 11-17%, 0% and 5% of the phenotypic variance in pilodyn, respectively. A comparison of residual coefficients of variation within seedling and cloned progenies indicated that C effects within clones were not a serious source of random variability. Despite the test sites encompassing a diverse range of locations, no important genotype by environment interaction was detected. The results suggested that an improvement strategy combining both recurrent selection for additive genetic merit and clonal testing may be adequate for optimizing genetic gains from this genetic base.