A Bayesian procedure coupled with Gibbs sampling was implemented to obtain inferences about genetic parameters and breeding values for height and diameter of 7-year-old Eucalyptus globulus Labill. is described. The data set consisted of 21 708 trees from 260 open-pollinated families taken from 10 different Australian provenances, from one Spanish population, and from two clones. The trees are distributed over eight sites in the south of Spain, with 20 blocks per site. Data were corrected for heterogeneity of phenotypic variances between blocks. In the analysis, a self-pollination rate of 30% for the open-pollinated families is assumed in the relationship matrix. The posterior means (and standard deviations) of the heritabilities of height and diameter and the genetic and phenotypic correlation were 0.217 (0.014), 0.128 (0.084), 0.768 (0.028), and 0.799 (0.003). Results from the standard restricted maximum likelihood method were 0.173, 0.113, 0.759, and 0.798, respectively. Most of the discrepancy in heritability estimates from both methods can be attributed to the adjustement of residual maximum likelihood estimates to the assumed self-pollination rate, which ignores the presence of clones in the trial. The effect of the method of prediction of breeding values (best linear unbiased prediction or Bayesian techniques) on the genetic superiority of the selected trees was not important. Differences in breeding value among provenances and among families were evidenced for both traits.