The objective of this study was to define different terminal sire flock environments, based on a range of environmental factors, and then investigate the presence of genotype by environment interactions (G×E) between the environments identified. Data from 79 different terminal sire flocks (40 Texel, 21 Charollais and 18 Suffolk), were analysed using principal coordinate and non-hierarchical cluster analyses, the results of which identified three distinct environmental cluster groups. The type of grazing, climatic conditions and the use of vitamins and mineral supplements were found to be the most important factors in the clustering of flocks. The presence of G×E was then investigated using data from the Charollais flocks only. Performance data were collected for 12 181 lambs, between 1990 and 2010, sired by 515 different sires. Fifty six of the sires had offspring in at least two of the three different cluster groups and pedigree information was available for a total of 161 431 animals. Traits studied were the 21-week old weight (21WT), ultrasound muscle depth (UMD) and log transformed backfat depth (LogUFD). Heritabilities estimated for each cluster, for each trait, ranged from 0.32 to 0.45. Genetic correlations estimated between Cluster 1 and Cluster 2 were all found to be significantly lower than unity, indicating the presence of G×E. They were 0.31 (±0.17), 0.68 (±0.14) and 0.18 (±0.21) for 21WT, UMD and LogUFD, respectively. Evidence of sires re-ranking across clusters was also observed. Providing a suitable strategy can be identified, there is potential for the optimisation of future breeding programmes, by taking into account the G×E observed. This would enable farmers to identify and select animals with an increased knowledge as to how they will perform in their specific farm environment thus reducing any unexpected differences in performance.