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The key biophysical impacts associated with projected climate change in the Murray-Darling Basin (MDB) include: declines in pasture productivity, reduced forage quality, livestock heat stress, greater problems with some pests and weeds, more frequent droughts, more intense rainfall events, and greater risks of soil degradation. The most arid and least productive rangelands in the MDB region may be the most severely impacted by climate change, while the more productive eastern and northern grazing lands in the MDB may provide some opportunities for slight increases in production. In order to continue to thrive in the future, livestock industries need to anticipate these changes, prepare for uncertainty, and develop adaptation strategies now. While climate change will have direct effects on livestock, the dominant influences on grazing enterprises in the MDB will be through changes in plant growth and the timing, quantity and quality of forage availability. Climate change will involve a complex mix of responses to rising atmospheric carbon dioxide levels, rising temperatures, changes in rainfall and other weather factors, and broader issues related to how people collectively and individually respond to these changes. Enhancing the ability of individuals to respond to a changing climate will occur through building adaptive capacity. We have, via secondary data, selected from the Australian Agricultural and Grazing Industries Survey, built a national composite index of generic adaptive capacity of rural households. This approach expresses adaptive capacity as an emergent property of the diverse forms of human, social, natural, physical and financial capital from which livelihoods are derived. Human capital was rated as ’high’ across the majority of the MDB compared with the rest of Australia, while social, physical and financial capital were rated as ’moderate’ to ’low’. The resultant measure of adaptive capacity, made up of the five capitals, was ’low’ in the northern and central-west regions of the MDB and higher in the central and eastern parts possibly indicating a greater propensity to adapt to climate change in these regions.