Nonadditive effects may contribute to genetic variation of complex traits. Their inclusion in genetic evaluation models may therefore improve breeding value estimates and lead to more accurate selection decisions. In this study, we evaluated a systematic series of models accounting for additive, dominance and first-order epistatic interaction (additive by additive, GxG; additive by dominance, GxD; and dominance by dominance, DxD) on body yearling weight (YWT) of 2,550 Tropical Composite (TC) and 2,111 Brahman (BB) cattle in Australia. For both breeds, similar estimates of additive and phenotypic variances and narrow and broad-sense heritability values were obtained across the evaluated models except when GxG effect was considered. In this case, additive variance was slightly lower than that obtained in the models which do not consider this effect. The estimated dominance and epistatic variances from additive and dominance effects (AD) and additive, dominance and epistatic effects models (ADE) were greater than that ADH and ADEH models (as described above plus heterozygosity as a covariate). However, all genetic parameter estimates were associated with a large standard deviation. Averaged across ADH and ADHE models, the magnitude of dominance variance compared to the phenotypic variance of YWT was 14% (BB) and 10% (TC). The magnitude of epistasis compared to the phenotypic variance for BB and TC was 17% and 29%, respectively for GxG; 0.7% and 0% for GxD; and 0% and 0% for DxD. The inclusion of nonadditive effects slightly improves the predictive accuracy of breeding values from 0.28 for A to 0.33 for ADHEGxG and from 0.18 for A to 0.23 ADEGxD in BB and TC cattle. Models that included heterozygosity (ADH and ADHE) must be used to estimate nonadditive genetic variance components. A 1 Mb sliding window analysis identified a region on BTA 14 explaining 10.08% and 1.21% of total genetic variance (additive + dominance) of YWT in BB and TC, respectively. Our results suggest that dominance, epistasis, and heterozygosity should be included in models for genetic parameters estimation. To identify the animals with the highest additive genetic value in selection decisions, only the additive effect should be used in evaluation models.