ABSTRACT. Census data do not support the widespread popular perception that urban encroachment on cropland in California is serious enough to justify programs of farmland preservation. Between 1949 and 1997 the acreage of harvested cropland declined near Los Angeles, in the San Francisco Bay area, and near Sacramento, but the high-value specialty agricultural production displaced from these areas has been relocated to more distant areas, where it has replaced lower-value field crops, and specialized agricultural production has increased steadily in the state. Vegetable production in the Salinas Valley and dairying near Los Angeles illustrate the twin processes of relocation and replacement. Urban encroachment actually has been a boon to California agriculture, because it has transferred massive amounts of urban capital to cash-strapped farmers and enabled them to develop efficient modern operations. Much of the concern about loss of farmland really is concern about loss of open space and amenities, and urban demand for water probably will be a greater constraint on California agriculture than will urban demand for land.