The systematic use of the same genotype in several different environments provides information that can be used to estimate genotype by environment interaction (G ✕ E) variances and parameters. Data from the UK Suffolk Sire Referencing Scheme Ltd were used to investigate a range of sire and dam by environment interactions in lamb weight (at 8 weeks and scanning) and body composition traits (muscle and fat depth). These interactions were calculated in a DFREML mixed model containing direct additive, maternal additive, maternal environmental random variance components and the covariance between direct and maternal additive effects. Sire interactions with year, flock and flock-year and dam effects within and between litters were investigated. The addition of all G ✕ E (co)variance components resulted in an improved fit of the model for all traits. Sire interactions accounted for between 2 and 3% of the phenotypic variance in all traits, usually at the expense of both additive effects. Maternal litter environmental variance components ranged from 10% (fat depth and muscle depth) to 20% (8-week weight) of phenotypic variance. Most of this variation was found in the residual component of variance when the term was omitted from the model. When fitting sire G✕ E components in a model the covariance between direct and maternal additive genetic effects, as a proportion of phenotypic variance, was reduced to a low level (from –0·36 to –0·08 for 8-week weight). Genotype by environment interactions form a significant source of variation in lamb growth and composition traits and reduce the high negative correlation between additive effects found previously in these traits.