Technical Abstract: The multi-trait genetic evaluation system for type traits was modified to estimate adjustments for heterogeneous variance (HV) simultaneously with estimated breeding values (EBV) for final score and 14 linear traits. Each within herd-year parity variance was regressed toward a predicted variance which was determined by fitting a model with fixed effects of mean final score for herd, size of contemporary group, appraisal month, and year-season and a random effect for herd-appraisal date. Method R was used to estimate variances for the heterogeneity model in each EBV iteration. To evaluate the effect of the adjustment, parent averages were calculated from evaluations with recent appraisals removed. The adjustment improved correlations between those parent averages and EBV from current data for bulls by a mean of 0.0039 over all traits. Annual trends for EBV were lower with HV adjustment than for unadjusted EBV for all traits except final score, rump angle for cows, and rump width for bulls, which were essentially unchanged. Mendelian sampling (evaluation minus mean of parent evaluations) SD declined less over time for HV adjusted than for unadjusted evaluations. The slope at year 2000 of Mendelian-sampling SD from HV adjusted evaluations was only 10.0% for udder depth to 42.7% for teat length of the slope for unadjusted evaluations. This HV adjustment was implemented in May 2001 for Jersey and in 2002 for other breeds with evaluations calculated by USDA and enables selection decisions to be more accurate because of improvement in evaluation accuracy.