The objective of this research was to design and compare nucleus breeding plans that might be recommended to the breeders of Brazilian dairy cattle. Plans for native dairy breeds were compared for the change of genetic merit in milk yield and in the economic return at 25-year investment periods. Effects of nucleus herd and commercial population sizes on genetic gain and net income were examined. Investment value of plans was studied for differences in the efficiency of embryo transfer techniques and in the sale price of cows and young bulls on genetic merit. Parent selection was based on records on individuals (for females), their full- and half-sibs, their dam, full-and half-sibs of their sire and their dam and their grandam. Within herd sire selection was restricted to a maximum of one bull per full-sib family. No matings of full-sibs were allowed. Annual economic summaries considered the age distribution of animals within herds. Alternative plans were investigated for their revenue, expense and net income streams and their investment value. The cumulative genetic gain of selected animals in lactational milk production was 1639 kg and 1435 kg for large plans with 64 donors (L) and small plans with 32 donors (S), respectively. The initial genetic lift for a population size of 20 000 animals was equal to 279 kg. When the size of the commercial population was increased to 50 000 animals, the lift was increased by 10%. Profitability in the different plans was achieved after the sale of cows and young bulls. The difference between cumulative discounted net returns at year 25 for L and S was proportional to the sale prices placed on the genetic merit of cows and bulls. The programmes of genetic improvement described were profitable and should be recommended to the breeders of Brazilian dairy cattle. Considering the criteria of gain to cost, the smaller plan seems to be the most reasonable to implement.