Breed additive and non-additive effects, and genetic parameters of lactation milk yield (LYD), 305-day milk yield (305YD), lactation length (LL), milk yield per day of lactation (DM) and lifetime milk yield (LTYD) were estimated in Ethiopian Boran cattle and their crosses with Holstein in central Ethiopia. The data analyzed included 2360 lactation records spread over 15 years. Ethiopian Boran cattle were consistently inferior (P < 0.01) to the Ethiopian Boran–Holstein crosses for the dairy traits studied. When the crosses were compared, LYD, 305YD and DM were higher (P < 0.01) for 75% and 87.5% crosses compared to 50% and 62.5% ones. However, the 50% crosses had higher (P < 0.01) LTYD than the other genetic groups. The individual additive genetic breed differences for milk production traits were all significant (P < 0.01). The estimates, in favor of Holstein, were 2055 ± 192 kg for LYD, 1776 ± 142 kg for 305YD, 108 ± 24 days for LL, 5.9 ± 0.5 kg for DM and 3353 ± 1294 kg for LTYD. Crossbreeding of the Holstein with the Ethiopian Boran resulted in desirable and significant (P < 0.01) individual heterosis for all milk production traits. The heterosis estimates were, 529 ± 98, 427 ± 72 kg, 44 ± 12 days 1.47 ± 0.23 kg and 3337 ± 681 kg, for LYD, 305YD, LL, DM and LTYD, respectively. The maternal heterotic effects were non-significant (P > 0.05) for all traits. Heritabilities of LYD, 305YD, LL, DM and LTYD for Ethiopian Boran were 0.20 ± 0.03, 0.18 ± 0.03, 0.26 ± 0.03, 0.13 ± 0.03 and 0.02 ± 0.04, respectively. The corresponding estimates for crosses were 0.10 ± 0.002, 0.11 ± 0.003, 0.63 ± 0.02, 0.45 ± 1.05 and 0.24 ± 0.11, respectively. Selection within each of the genetic groups and crossbreeding should substantially improve the milk production potential of the Ethiopian Boran breed under such production system.