The objective of this work was to estimate covariance functions for additive genetic and permanent environmental effects and, subsequently, to obtain genetic parameters for buffalo's test-day milk production using random regression models on Legendre polynomials (LPs). A total of 17 935 test-day milk yield (TDMY) from 1433 first lactations of Murrah buffaloes, calving from 1985 to 2005 and belonging to 12 herds located in São Paulo state, Brazil, were analysed. Contemporary groups (CGs) were defined by herd, year and month of milk test. Residual variances were modelled through variance functions, from second to fourth order and also by a step function with 1, 4, 6, 22 and 42 classes. The model of analyses included the fixed effect of CGs, number of milking, age of cow at calving as a covariable (linear and quadratic) and the mean trend of the population. As random effects were included the additive genetic and permanent environmental effects. The additive genetic and permanent environmental random effects were modelled by LP of days in milk from quadratic to seventh degree polynomial functions. The model with additive genetic and animal permanent environmental effects adjusted by quintic and sixth order LP, respectively, and residual variance modelled through a step function with six classes was the most adequate model to describe the covariance structure of the data. Heritability estimates decreased from 0.44 (first week) to 0.18 (fourth week). Unexpected negative genetic correlation estimates were obtained between TDMY records at first weeks with records from middle to the end of lactation, being the values varied from -0.07 (second with eighth week) to -0.34 (1st with 42nd week). TDMY heritability estimates were moderate in the course of the lactation, suggesting that this trait could be applied as selection criteria in milking buffaloes.