The spatial pattern of landscape reconstruction makes a substantial difference to environmental outcomes. We develop a spatially explicit bio-economic model that optimises the reconstruction of a heavily cleared landscape through revegetation. The model determines the spatial priorities for revegetation that minimises economic costs subject to achieving particular improvements in habitat for 29 woodland-dependent bird species. The study focuses on the Avoca catchment (330 thousand ha) in North-Central Victoria. Our model incorporates spatial pattern and heterogeneity of existing and reconstructed vegetation types. The revegetation priorities are identified as being: sites in the vicinity of existing remnants, riparian areas, and parts of the landscape with diverse land uses and vegetation types. Optimal reconstruction design is affected by opportunity costs due to the loss of agricultural production and the costs of revegetation. 1 Centre for Environmental Economics and Policy, School of Agricultural and Resource Economics, University of Western Australia, Crawley, WA, 6009 2 Department of Primary Industries, Rutherglen, RMB 1145 Chiltern Valley Rd, Rutherglen, Victoria, 3685 3 North Central Catchment Management Authority, PO Box 18, Huntly, Victoria, 3551