This study presents an acoustic analysis of vowel realisations in contexts where, in Australian English, a historical contrast between unstressed /ɪ/ and /ə/ has largely diminished in favour of a central schwa-like variant. The study is motivated by indications that there is greater complexity in this area of vowel variation than has been conventionally set out in the existing literature, and our goal is to shed new light by studying a dataset of conversational speech produced by 40 young speakers from Perth, WA. In doing so, we also offer some critical thoughts on the use of Wells’ lexical sets as a framework for analysis in work of this kind, in particular with reference to the treatment of items in unstressed position, and of grammatical (or function) words. The acoustic analysis focused on the realisation in F1/F2 space of a range of /ɪ/ and /ə/ variants in both accented and unaccented syllables (thus a broader approach than a focus on stressed kit vowels). For the purposes of comparison, we also analysed tokens of the fleece and happy-tensing lexical sets. Grammatical and non-grammatical words were analysed independently in order to understand the extent to which a high-frequency grammatical word such as it might contribute to the overall pattern of vowel alternation. Our findings are largely consistent with the small amount of previous work that has been carried out in this area, pointing to a continuum of realisations across a range of accented and unaccented contexts. The data suggest that the reduced historical /ɪ/ vowel encountered in unaccented syllables cannot be straightforwardly analysed as a merger with /ə/. We also highlight the way in which the grammatical word it participates in this alternation.