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Inbreeding depression, the reduction of fitness and performance, is due to an increase in the mating of related individuals. Based on the purge hypothesis, inbreeding and breeding over generations reduce the effect of deleterious alleles responsible for inbreeding depression. Thus, recent inbreeding is assumed to be more harmful than ancestral inbreeding. This study aimed at evaluating the effects of new and ancestral inbreeding on milk, fat and protein production in Iranian Holstein cattle. The secondary objective was to examine the changes in predicted breeding values when the inbreeding effect was included in the model's analysis. To this end, inbreeding coefficients were calculated using the pedigree of 2,394,517 Holstein cattle to achieve these goals. In addition, 419,132 records of milk, fat and protein yields of first parity cows were collected to assess inbreeding depression and breeding values. The average inbreeding coefficients were 0.83% and 1.68% for the whole population and the inbred animals, respectively. A 1% increase in classical pedigree-based inbreeding coefficient was associated with a decrease of 11.99 kg in milk, 0.39 kg in fat and 0.29 kg in protein. The effect of ancestral inbreeding was more detrimental to performance traits than the effect of new inbreeding. This result contradicted the hypothesis of purging. By including the inbreeding coefficient in the model, the rank of animals remained unchanged, but the average predicted breeding values increased. In general, inbreeding depression was observed in Iranian Holstein cows; however, no evidence of purging was observed. The average of inbreeding coefficients was not high in this population, although accounting for inbreeding coefficients in the analytical model did significantly increase the predicted breeding values. It is recommended that the analytical model incorporate the inbreeding coefficient to improve the accuracy of genetic evaluation. In future studies, inbreeding depression should be assessed using genomic data for performance and reproduction traits., (© 2023 John Wiley & Sons Ltd.)