Grassland production systems contribute 40% to Australia’s gross agricultural production value and utilise >50% of its land area. Across this area, diverse systems exist, but these can be broadly classified into four main production systems: (i) pastoral grazing, mainly of cattle at low intensity (i.e. <0.4 dry sheep equivalents/ha) on relatively unimproved native rangelands in the arid and semi-arid regions of northern and central Australia; (ii) crop–livestock systems in the semi-arid zone where livestock graze a mixture of pastures and crops that are often integrated; (iii) high-rainfall, permanent pasture zone in the coastal hinterland and highlands; and (iv) dairy systems covering a broad range of environments and production intensities. A notable trend across these systems has been the decline in sheep numbers and the proportion of income from wool, with beef cattle or sheep meat increasingly important. Although there is evidence that most of these systems have lifted production efficiencies over the past 30 years, total factor productivity growth (i.e. change in output relative to inputs) has failed to match the decline in terms of trade. This has renewed attention on how research and development can help to increase productivity. These industries also face increasing scrutiny to improve their environmental performance and develop sustainable production practices. In order to improve the efficiency and productivity of grassland production systems, we propose and explore in detail a range of practices and innovations that will move systems to new or improved states of productivity or alter efficiency frontiers. These include: filling gaps in the array of pastures available, either through exploring new species or improving the adaptation and agronomic characteristics of species currently sown; overcoming existing and emerging constraints to pasture productivity; improving livestock forage-feed systems; and more precise and lower cost management of grasslands. There is significant scope to capture value from the ecological services that grasslands provide and mitigate greenhouse gas emissions from livestock production. However, large reductions in pasture research scientist numbers (75–95%) over the past 30 years, along with funding limitations, will challenge our ability to realise these potential opportunities.