Atriplex vesicaria Heward ex Benth. (Chenopodiaceae) is a widespread perennial shrub in southern Australia's chenopod rangelands but is sensitive to grazing. A detailed investigation of the demography and population dynamics of A. vesicaria under sheep grazing was conducted over 6.5 years at a range of sites across a typical paddock to assess the long-term effects of grazing on the species and elucidate the mechanisms of population change under grazing. The effects of rainfall on recruitment and mortality were also examined. Six-monthly censuses of all A. vesicaria individuals were conducted in permanent grazed and ungrazed plots at sites located across an 1100-ha paddock. Grazing increased adult shrub mortality close to water and reduced recruitment over a broader area of the paddock, but seedling survival did not appear to be affected by grazing. As a result of these changes, the population declined on grazed plots up to 2200 m from water during the study, but the decline was greatest closer to water. The population was most dynamic at the sites furthest from the water point where it was unaffected by grazing because of the greater recruitment and mortality of young plants, but because these processes balanced out over time, population density was effectively unchanged by the end of the study. Although statistical models indicated that six-monthly rainfall did not explain temporal variation in recruitment or mortality, rainfall nevertheless has a central role in both processes. In particular, longer periods of favourable rainfall and drought appear to have an important influence on recruitment and mortality, respectively, with heavy grazing during a drought period increasing mortality. Occasional shortages of seed or rains occurring during the warmer months when seed germination is limited possibly explain poor recruitment at sites unaffected by grazing following good rainfall.