Australia has vast areas of grazing lands covering around two-thirds of a continent larger than the continental United States of America. Since European settlement after 1788 the area of grasslands has increased due to land clearing and management of those grasslands has progressed from an exploitive through reactive periods. The exploitive phase saw the rapid expansion of livestock across the continent, often resulting in overexploitation of natural resources as farmers tried to establish the optimal stocking rate. The reactive phase was first characterized by moving on to new areas as existing grasslands were overused, then, when much of the available land had been cleared, rehabilitation was attempted by sowing introduced species. As the terms of trade for livestock production continued to become less positive, farmers then focused more on trying to make better use of the naturalized mixtures that developed under livestock grazing, and only resorting to pasture re-sowing where economic benefits from so doing were clear. Coming to terms with a unique and drier landscape characterized much of the early period of European settlement. Early grazing research tended to be focused on livestock performance and did not always provide solutions to the longer-term management of grasslands. More recently, research has developed more efficient management practices to rehabilitate or maintain the grassland resource base. Farming practices are changing, as 490better rules have been developed to define when and why animals are moved between paddocks. Examples are discussed of where the subtle use of strategic rest and graze periods can rehabilitate grasslands and enhance production. The future management of Australia's grasslands will, however, require a more proactive approach based upon the application of a broad definition of sustainable systems and a more rational consensus as to how producers need to manage grazing ecosystems over the longer term. Increasing social pressures require a more environmentally friendly approach rather than an exploitive, degradation pathway. To achieve such a preferred future will require considerable research into sustainable grazing systems and extension programmes that deliver the necessary tools to farmers. It is argued that solutions are possible that would improve the productivity of grasslands while satisfying the needs for more sustainable, biodiverse environments. Future markets could include payments to farmers for environmental services and maintaining the resource base that will affect how grasslands are managed. Many of the impacts and lessons learnt in Australia are paralleled in numerous other countries.