Recent advances in molecular genetic techniques will make dense marker maps available and genotyping many individuals for these markers feasible. Here we attempted to estimate the effects of approximately 50,000 marker haplotypes simultaneously from a limited number of phenotypic records. A genome of 1000 cM was simulated with a marker spacing of 1 cM. The markers surrounding every 1-cM region were combined into marker haplotypes. Due to finite population size N(e) = 100, the marker haplotypes were in linkage disequilibrium with the QTL located between the markers. Using least squares, all haplotype effects could not be estimated simultaneously. When only the biggest effects were included, they were overestimated and the accuracy of predicting genetic values of the offspring of the recorded animals was only 0.32. Best linear unbiased prediction of haplotype effects assumed equal variances associated to each 1-cM chromosomal segment, which yielded an accuracy of 0.73, although this assumption was far from true. Bayesian methods that assumed a prior distribution of the variance associated with each chromosome segment increased this accuracy to 0.85, even when the prior was not correct. It was concluded that selection on genetic values predicted from markers could substantially increase the rate of genetic gain in animals and plants, especially if combined with reproductive techniques to shorten the generation interval.