Genetic parameter estimates for scrotal circumference (SC), testis diameter (TD) and two-tooth liveweight (LW) were obtained for 1380 two-tooth Merino rams born from 1986 to 1998 on the Tygerhoek Experimental Farm. The effect of SC of service sires (n = 263) on ewe fertility was also investigated. Year of birth, selection group and LW were significant sources of variation for both SC and TD. SC had a significant effect on ewe fertility. Heritability estimates ranged from 0.29 to 0.40, 0.25 to 0.38 and from 0.49 to 0.52 for SC, TD and LW, respectively. Adjustment for LW decreased heritability estimates of SC and TD and the genetic correlations between the latter traits. Rams with an unadjusted SC of less than 30 cm should not be used.