Twelve 3/4 Angus (Angus) and 12 Wagyu-cross (1/2 Wagyu x 1/2 Angus) (Wagyu) heifers were weaned at 180 d of age and grazed on endophyte-infected tall fescue for 16 mo before entering the feedlot as 2-yr-olds. Twelve 3/4 Angus heifer calves and 12 Wagyu-cross heifer calves from the following year's calf crop were weaned at 142 +/- 4.1 d of age, immediately adjusted to an 80% concentrate diet, and finished as calves. All heifers were fed a common finishing diet until an estimated 50% of their respective group would grade USDA low Prime or better based on ultrasound predictions. Ultrasound measurements of s.c. and i.m. fat depots were recorded at 60-d intervals throughout the finishing period. Heifers finished as calves had higher (P = 0.02) marbling scores at any given fat thickness and gained more efficiently (P < or = 0.01) at any given marbling score than heifers finished as 2-yr-olds. Gain:feed decreased quadratically (P < or = 0.05) as 12th-rib fat thickness increased for Angus and Wagyu heifers. Gain:feed decreased linearly (P < or = 0.01) for Wagyu calves and quadratically (P < or = 0.01) for Angus calves as 12th-rib fat thickness increased. However, these differences in slope were not different (P = 0.34) as a result of breed among heifers finished as calves. Marbling score increased linearly (P < or = 0.01) as 12th-rib fat thickness increased for Angus and Wagyu heifers finished as 2-yrolds or as calves. However, Wagyu heifers, regardless of age at feedlot entry, had a higher marbling score (P < or = 0.05) at any given 12th-rib fat thickness than Angus heifers. Finishing early-weaned heifers as calves as opposed to 2-yr-olds results in i.m. fat deposition during a period of more efficient growth. Additionally, including Wagyu genetics into the breeding of early-weaned heifers finished as calves or as 2-yr-olds results in higher marbling scores at any 12th-rib fat thickness.