This study was conducted to estimate genetic parameters and breeding values of milk yield for Holstein cows, from lactation records between 1997 - 2002 in Karacabey and Tahirova State Farms. Breeding values were estimated according to 2 × 305 day milk yield records of 1004 cows with 1899 lactations. The heritability and repeatability of milk yield were estimated as 0.13 and 0.44 for Karacabey State Farm, 0.29 and 0.41 for Tahirova State Farm and 0.15 and 0.43 for Karacabey and Tahirova State farms combined, respectively. The estimated breeding values for Holsteins reared in Karacabey and Tahirova State farms, show a positive genetic trend for milk yield but there was a fluctuation from one year to another year. As a conclusion, estimation of breeding values with properties of Best Linear Unbiased Prediction and selecting and culling according to these estimated breeding values together might help to increase annual genetic gain in these herds.