Crossbreeding is a common practice among commercial sheep producers to improve animal performance. However, genetic evaluation of U.S. sheep is performed within breed type (terminal sire, semi-prolific, and western range). While incorporating crossbred records may improve assessment of purebreds, it requires accounting for heterotic and breed effects in the evaluation. The objectives of this study were to: 1) describe the development of a paternal composite (PC) line, 2) determine the effect of direct and maternal heterosis on growth traits of crossbred lambs, 3) estimate (co)variance components for direct and maternal additive, and uncorrelated maternal environmental, effects, and 4) provide an interpretation of the estimates of random effects of genetic groups, and to use those solutions to compare the genetic merit of founding breed subpopulations. Data included purebred and crossbred records on birth weight (BN; n = 14,536), pre-weaning weight measured at 39 or 84 d (WN; n = 9,362) depending on year, weaning weight measured at 123 d (WW; n = 9,297), and post-weaning weight measured at 252 d (PW; n = 1,614). Mean (SD) body weights were 5.3 (1.1), 16.8 (3.9) and 28.0 (7.6), 39.1 (7.2), and 54.2 (8.7) kg for BN, WN (at the two ages), WW, and PW, respectively. In designed experiments, the Siremax, Suffolk, Texel, Polypay, Columbia, Rambouillet, and Targhee breeds were compared within the same environment. Estimates of heterotic effects and covariance components were obtained using a multiple trait animal model. Genetic effects based on founders' breeds were significant and included in the model. Percent estimates of direct heterosis were 2.89 ± 0.61, 2.60 ± 0.65, 4.24 ± 0.56, and 6.09 ± 0.86, and estimates of maternal heterosis were 1.92 ± 0.87, 4.64 ± 0.80, 3.95 ± 0.66, and 4.04 ± 0.91, for BN, WN, WW, and PW, respectively. Correspondingly, direct heritability estimates were 0.17 ± 0.02, 0.13 ± 0.02, 0.17 ± 0.02, and 0.46 ± 0.04 for BN, WN, WW, and PW. Additive maternal effects accounted for trivial variation in PW. For BN, WN, and WW, respectively, maternal heritability estimates were 0.16 ± 0.02, 0.10 ± 0.02, and 0.07 ± 0.01. Uncorrelated maternal environmental effects accounted for little variation in any trait. Direct and maternal heterosis had considerable impact on growth traits, emphasizing the value of crossbreeding and the need to account for heterosis, in addition to breed effects, if crossbred lamb information is included in genetic evaluation.