Ideal free distribution (IFD) theory predicts that animals in competitive situations should distribute themselves among available habitat patches according to the density of conspecifics and its regulatory effect on resources. To investigate the applicability of IFD models to free-ranging herbivores, we quantified the dispersion and foraging behaviour of eastern grey kangaroos Macropus giganteus among habitat patches of differing suitability, within and outside a reservoir catchment in southern Victoria, Australia. Kangaroo densities within the catchment had a regulatory effect on resource density, while surrounding farmland maintained a higher standing crop despite higher densities of competitors. This difference was slight in autumn, however, when the system was apparently close to equilibrium. Gross bite rates of individuals foraging in farmland were lower than for individuals foraging within the catchment, and vigilance behaviour occurred more frequently in farmland habitat than any other, decreasing time devoted to feeding. Interference competition occurred in only 1.9% of focal samples, although competitive differences based on phenotype were observed. Although resource gains by individual kangaroos are likely to be influenced by other factors, including resource dynamics, predation risk and phenotypic differences, IFD theory provides a valuable analytical framework for this herbivore foraging system.