The inclusion of perennial pasture phases in cropping rotations has been widely promoted throughout Australia for reducing the incidence of dryland salinity. To a lesser extent, they have also been promoted to enhance the management of herbicideresistant weeds. No previous economic analysis of perennial pasture has considered both of these benefits. This study combines a dynamic linear programming model to estimate the magnitude of salinity-related benefits and a complex simulation model to assess the economics of herbicide-resistance management. We present a case study of the perennial pasture lucerne ( Medicago sativa L.) in the Wheatbelt of Western Australia, where the weed annual ryegrass ( Lolium rigidum Gaudin) is resistant to multiple herbicide groups. Sequences incorporating lucerne are the most profitable land use at the standard set of parameter values if (i) annual ryegrass is resistant to all selective herbicides, (ii) the water table is so shallow (approximately < 3.5 m deep) that frequent rotation with perennials is required to avert soil salinisation, (iii) sheep production is highly profitable, or (iv) there is a combination of less extreme cases. The value of perennial pasture is sufficient under these circumstances to overcome its high establishment cost and the displacement of multiple years of crop. Consideration of dryland salinity and herbicide resistance are about equally important in evaluating the economics of lucerne; neither should be neglected.