The objectives of this study were to determine the mode of inheritance of the callipyge gene and to evaluate the growth, ADFI, feed efficiency, reproductive performance, and wool growth of sheep that are heterozygous for the callipyge gene. Ewes (n = 236) with a normal muscle phenotype and genotype were mated to three heterozygous rams that expressed the callipyge gene. Lambs (n = 311) were subjectively classified at weaning (90 to 120d) according to muscle phenotype by a panel of three evaluators working independently. The callipyge muscle phenotype was expressed in 150 lambs, whereas 161 lambs expressed a normal muscle phenotype. The percentage of lambs expressing the callipyge muscle phenotype (48.2%) did not differ (P > .1) from the expected 50%. Growth rate was similar for lambs of both phenotypes regardless of sex. Feed efficiency was superior (P < .05) for both male and female lambs with the callipyge muscle phenotype. Average daily feed intake was lower for male (P < .02) and female (P < .004) lambs with the callipyge muscle phenotype. Grease fleece weight and staple length at 12 mo were superior (P < .03) for ewes with a normal muscle phenotype. These results indicate that the callipyge gene in sheep is dominant when inherited from the paternal parent and lambs expressing the callipyge gene have increased feed efficiency and reduced ADFI.