Genotype by environment interaction can be detected via the estimation of genetic correlations between environments under an animal model based on data comprising genetic links between the strata. Genetic correlations were estimated for protein yield of Holstein cows within and across regions of Germany using REML under an animal model for lactation and test-day records. Subsets of the entire data were created, stratified by region or herd size within region, and comprised between 16,307 and 132,972 cows with first-lactation records. Substantial heterogeneity exists between regions in Western and Eastern Germany. In Western states, most farms are small, with typical herd sizes of 30 to 60 cows, whereas in Eastern states, mostly large herds with herd sizes of 500 to 2000 cows are common. The results show drastic differences for residual and permanent environmental variance components between Eastern and Western regions with increases of around 30% for Eastern regions. Additive genetic variances were of similar magnitude in both regions. Genetic correlations between Eastern and Western states were between 0.90 and 0.95 but dropped to 0.79 when data from an Eastern state were reduced to contain large herds only. The results indicate that differences in herd size account for more of the differences in genetic correlation than do geographic regional differences.