Inbreeding coefficients are calculated routinely for all animals included in national genetic evaluations for yield traits. The base population for inbreeding is defined as animals born during 1960. Animals with unknown parents are assumed to have inbreeding coefficients that are equal to the mean of coefficients for animals with known parents born during the same year. Mean inbreeding coefficients reached .03 to .04 for recent years, and coefficients for some animals exceeded .50. The annual increase in level of inbreeding was highest for Milking Shorthorns, but the rate of change of that increase was greatest for Holsteins. Accounting for inbreeding in calculation of the inverse of the relationship matrix had only a small effect on evaluations. For Jersey, the maximum change in breeding value was 73 kg of milk for cows and 40 kg of milk for bulls with > or = 10 daughters. Estimates of inbreeding depression were similar across breeds for production traits and were -29.6 kg of milk, -1.08 kg of fat, and -.97 kg of protein per 1% of inbreeding for Holsteins. In January 1994, the USDA began considering the percentage of inbreeding when calculating inverses of relationship matrices, the largest matrix representing over 20 million Holsteins; this inbreeding percentage was released to the dairy industry for bulls.