In the mid 1930's self-regenerating annual legume pastures were adopted into southern Australian cereal farming systems. The use of subterranean clover (Trifolium subterraneum L.) and various Medicago species, together with applications of superphosphate, improved soil fertility and led to increased cereal yields and greater sheep and cattle production. This review discusses the development of these cereal—ley systems with particular reference to the role of annual legume pastures, and points out their relevance to other regions with similar climatic patterns.