The Monte Carlo method was used to simulate selection and inbreeding in three populations of beef cattle. Population 1 had 16 closed lines, each with one sire and 10 dams; population 2 had eight lines, each with two sires and 20 dams and population 3 was analogous to one large line, with 16 sires and 160 dams. Production of progeny over a 25-yr period that included overlapping generations was simulated in each population. Two traits with initial narrow sense heritabilities of .098 and .161, respectively, were studied. Genotypic values were determined two loci at a time for the 64 independent loci in an individual's genome on the basis of nine different modes of gene action, including dominance, overdominance, epistasis and additive gene action. The genome was divided arbitrarily into eight sections of eight unlinked loci each, with one of the nine modes of gene action controlling the determination of genotypic values in each section. Phenotypic values were generated by the addition of normally distributed random environmental factors to the genotypic values. Index values were calculated as the simple average of the phenotypes for traits 1 and 2. Selection was entirely within lines, with index values the sole selection criterion. The highest indexing males and females within each line were mated, with no attention given to relationships among animals during selection or mating. Genetic improvement was small in all three populations. The mean genotypic value for trait 1 remained virtually unchanged in population 1, increased by 1.8% in population 2 and increased by 2.2% in population 3 from the base population to the last 5-yr period. Corresponding increases for trait 2 were 1.6, 1.3 and 2.2% in populations 1, 2 and 3, respectively. Nearly all of the increase observed in overall genotypic values for traits 1 and 2 resulted from increased genotypic values in the sections of the genome exhibiting additive and additive × additive gene action. Large changes in gene frequency occurred only in the section of the genome in which the additive mode of gene action controlled both traits. Frequencies in the remaining sections fluctuated slightly, but always remained near the initial values of .5. Higher inbreeding levels were attained as size of line decreased. Additive and additive × additive sections of the genome contributed most to increases in overall inbreeding levels. A great deal of variation in response to inbreeding was observed among lines, with genotypic means for the majority of lines declining with increased inbreeding. Inbreeding depression estimates were largest when the traits were influenced by the overdominance mode of gene action, followed, in order, by estimates obtained when traits were influenced by the dominance and dominance × dominance modes.