Clinical mastitis (CM) and monthly test-day somatic cell count (SCC) records on Holstein cows were used to investigate the genetic and economic relationship of lactation average (of natural logarithms of) monthly test-day SCC (LSCC) with CM. After editing, there were 23663 lactation records on 17937 cows from 257 herds. Three groups of herds were first identified as having low (L), medium (M) and high (H) incidences of CM from the original or pooled (P) data set. Genetic parameters were estimated for the original and three data sub-sets (derived from the three herd groups). Expected genetic responses to selection against CM were calculated using genetic parameters of each data set separately, with an adapted version of the UK national index (£PLI-profitable lifetime index). Indirect economic values of SCC (EVSCC) were calculated as the direct cost of CM per cow per lactation weighted by the genetic regression coefficient of CM lactation records on their sires’ predicted transmitting ability for SCC (PTASCC). All genetic regression analyses were based on linear and threshold-liability models. Heritabilities and repeatabilities, respectively, were 0034 and 0·111 for CM and 0120 and 0·347 for LSCC in the original data set. Genetic, permanent environmental, residual and phenotypic correlations between CM and LSCC for the original (pooled) data set were 0·70, 0·44, 013 and 0·20, respectively. Parameter estimates for the three herd groups differed, with magnitude of the estimates increasing with increase in incidence from L to H herd groups. The EVSCC per unit of PTASCC for L, M, H and P herd groups, respectively, were £004, £0·15, £0·33 and £018 on the observed and £0·86, £0·96, £1·22 and £110 on the underlying-liability scales. Selection for mastitis resistance, using SCC as an indicator trait in an extended version of £PLI, resulted in a selection response of 0·9, 21, 1·7 and 1·9 more cases per 100 cows after 10 years of selection in L, M, H and P herd groups, respectively. These results suggest that genetic responses to selection for CM resistance as well as the EVSCC are specific to herd incidence and hence would be appropriate for customized selection indexes. The increase in CM cases was greater when CM was excluded from the £PLI (2·8 v 1·9), hence it is recommended that CM should be included in the breeding goal in order to arrest further decline or to make improvement in genetic resistance to clinical mastitis.