The possible impacts of projected climate change on Australian agriculture are outlined. The characteristics of climate change that underpin the creation of economic impacts for agriculture are also described and discussed. Climate change is shown to generate spatially and temporally diverse impacts, with many regions likely to experience increased downside risk in agricultural production. Some regions, such as south-west Australia, are projected to be particularly at risk of adverse outcomes associated with climate change. The likely gradual unfolding of climate change, however, may provide farmers in many regions and industries with sufficient time to utilise or develop adaptation strategies. Many of these strategies are likely to be based on farmers’ current responses to climate variability. Investment in R&D and innovation are likely to be important ingredients in facilitating farmers’ adaptation to climate change. Farmers are likely to face additional costs of capital adjustment due to climate change and investment in long-lived climate-dependent agricultural assets such as irrigation infrastructure, new vineyards and timber plantations will become more problematic. Investing in ecological assets in rural regions, especially where these assets may become stranded by climate change, is also increasingly made problematic.