Two strategies for crossbreeding of indigenous and exotic cattle for milk production in the tropics, viz. rotational crossing and formation of a composite breed, have been compared. Genetic considerations suggest that rotational crossing would lead to somewhat better dairy performance, mainly because of more heterozygosity. Predictions based on the performance of adjacent genetic groups as obtained from a comprehensive literature review point in the same direction. Rotational crossbreeding depends on a continuous introduction of bulls of both parental breeds. The herd will consist of 2 (or more) genetic groups, which might be inconvenient for breeding arrangements, but provides more flexibility. The system requires good organisation and is most suitable in large farms. In small scale dairying the composite breed strategy is the most practical approach to dairy cattle breeding in the tropics.