Productivity of ungrazed, long-duration wheat crops was compared with crops grazed by sheep during the late vegetative and early reproductive phases in two on-farm experiments in south-eastern Australia. In the first experiment in dry conditions grazing 25 ewes/ha for 20 days increased grain yield from 3.3 to 3.8 t/ha. The second experiment in wetter conditions compared six durations of grazing by 25 ewes/ha. In this experiment, the effects of grazing varied from a small yield increase with 11 days grazing to a reduction from 6.7 to 4.5 t/ha with 55 days grazing. In both seasons the combined returns from grazing and grain exceeded returns from grain alone. The different patterns of water use appear to explain the effects of grazing on yield. More soil water accumulated during grazing and was used during grain filling when water use efficiency for grain production was high. In both experiments grazing caused slower crop development, with about one day's delay in flowering and maturity for every 4-5 days grazing. In the second experiment, grazing resulted in a net loss of 50 kgN /ha from the crop. The apparent recovery of topdressed N fertiliser was 50% for ungrazed crops but less than 20% for the most heavily grazed crops. The effect of the low recovery was that N removed by grazing was not replaced by fertiliser.