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Sexed semen technology is now commercially available in many countries around the world, and is primarily used in dairy cattle breeding. Sperm are sorted by flow cytometry on the basis of a 4% difference in DNA content between sperm containing X and Y chromosomes. Despite reliably producing a 90% gender bias, the fertility of the sexed semen product is compromised compared with conventional semen. The negative implications of the reduced fertility of sexed semen are amplified in seasonal systems of dairy production, as the importance of fertility is greater in these systems compared with year-round calving systems. A review of the literature indicates that conception rates (CR) to 1st service with frozen-thawed sexed semen are ~75% to 80% of those achieved with conventional frozen-thawed semen. Preliminary results from a large-scale field trial carried out in Ireland in 2013 suggest that significant improvements in the performance of sexed semen have been made, with CR of 87% of those achieved with conventional semen. The improved fertility of a sexed semen product that delivers a 90% gender bias has considerable implications for the future of breeding management in pasture-based dairy production systems. Sexed semen may facilitate faster, more profitable dairy herd expansion by increasing the number of dairy heifer replacements born. Biosecurity can be improved by maintaining a closed herd during the period of herd expansion. In a non-expansion scenario, sexed semen may be used to increase the value of beef output from the dairy herd. The replacement heifer requirements for a herd could be met by using sexed semen in the 1st 3 weeks of the breeding season, with the remaining animals bred to beef sires, increasing the sale value over that of a dairy bull calf. Alternatively, very short gestation sires could be used to shorten the calving interval. Market prices have a considerable effect on the economics of sexed semen use, and widespread use of sexed semen should be restricted to well managed herds that already achieve acceptable herd fertility performance.