Genotype x environment interaction (G x E) is increasingly important, because breeding programs tend to be more internationally oriented. The aim of this theoretical study was to investigate the effects of G x E on genetic gain in sib-testing and progeny-testing schemes. Loss of genetic gain due to G x E was predicted for different values of heritability, number of progeny per dam, number of progeny per sire, proportion of selected sires, and population size in the selection environment. Two environments were considered: a selection environment (SLE) and a production environment (PDE). The breeding goal was only for performance in PDE. A pseudo-BLUP selection index was used to predict genetic gain. Recording of half-sibs or progeny in PDE limited the loss in genetic gain in PDE due to G x E between SLE and PDE. Progeny-testing schemes had less loss in genetic gain than sib-testing schemes. Higher heritability increased the loss in genetic gain, whereas increasing the number of progeny per sire in PDE decreased the loss in genetic gain. The number of progeny per sire required to minimize loss in genetic gain due to G x E was greater for sib-testing schemes than for progeny-testing schemes. More progeny per dam slightly increased the loss in genetic gain. Genetic gains for sex-limited and carcass traits were less affected by G x E than traits measured on both sexes. Loss in genetic gain was due to decreased accuracy of selection in most situations, but it was due to decreased selection intensity in situations with small population size and a low proportion of selected sires. It was concluded that recording performance of relatives in PDE minimizes loss in genetic gain due to G x E, and that progeny-testing schemes rather than sib-testing schemes are preferable in situations with low to moderate heritability (h(2) <or= 0.3), relatively short generation interval of progeny-tested sires (L(prog)/L(sib) <or= 1.7), and moderate to severe G x E interaction (r(g) <or= 0.8).