In this study the traditional system of Continuous grazing was compared with the new technique of Cell grazing on a large grazing paddock in south-east Queensland. Results show large quantities of soil and soluble nutrients being lost to the receiving water bodies under the traditional system of Continuous grazing. The concentrations of sediment, organic matter and plant nutrients in the runoff leaving paddock were significantly reduced when the rotational system of Cell grazing was adopted. The new Cell grazing system also reduced erosion, sediment transport and surface runoff as compared with the Continuous grazing. The presence of a higher quantities of litter and above ground organic materials on lands under Cell grazing reduced hoof pressure and soil compaction, which in turn resulted in higher infiltration of rain water, lower surface runoff and reduced soil erosion and nutrient loss into surface water resources. It appears as though the long rest period for the land, provided under the Cell grazing system, is largely responsible for all above beneficial impacts on grazing lands, animal feed production and down-steam water quality.