The transition from shepherding to fencing in colonial Australia was a technological revolution replacing labour with capital. Fencing could not be widespread in Australia until an historical conjunction of technological, social and economic changes: open camping of sheep (from about 1810), effective poisoning of dingoes with strychnine (from the mid-1840s), introduction of iron wire (1840s), better land tenure (from 1847), progressive reduction of Aboriginal populations, huge demand for meat (from 1851) and high wages (from 1851). Labour shortages in the gold-rushes of the early 1850s were the final trigger, but all the other changes were essential precursors. Available data are used to test the alleged benefits of fencing: a higher wool cut per head; an increased carrying capacity; savings in wages and the running costs of stations; less disease in flocks; larger sheep; higher lambing percentages, and use of land unsuitable for shepherding. Many of the benefits were real, but some cannot be verified. By the mid-1880s, over ninety-five per cent of sheep in New South Wales were in paddocks, wire fences were spreading rapidly, and the cost of fences was falling. However, shepherding persisted in remote northern areas of Australia until well into the twentieth century.