Mediterranean environments are characterised by hot, dry summers and cool, wet winters. The native vegetation in Mediterranean-climatic regions is predominantly perennial shrubs and trees intermixed with annual forbs. In south-western Australia, the spread of agriculture has seen the well adapted perennial vegetation replaced by rainfed annual crops and pastures. This has increased waterlogging and secondary salinity, thereby causing loss of productivity in ~10% of the cleared land area. To reduce deep drainage and make the agricultural systems environmentally sustainable requires the re-introduction of perennial vegetation in the form of belts of trees or shrubs, and phase-farming systems with perennials such as lucerne replacing annual pastures between the cropping years. To be economically viable, agricultural productivity needs to increase by at least 3% per annum. Yields of dryland wheat, the predominant crop in the Mediterranean agricultural regions of Australia, have increased at ~1%/year for the century preceding the 1980s and since then by nearly 4%/year. Increases have arisen from both genotypic and agronomic improvements. Genotypic increases have arisen from selection for earliness, early vigour, deep roots, osmotic adjustment, increased transpiration efficiency, improved disease resistance, and an improved harvest index from high ear weight (grain number) at flowering and high assimilate storage and remobilisation. Agronomic increases have arisen from early sowing that has been enabled by minimum tillage, increased fertiliser use, especially nitrogen, weed control, and rotations to improve weed control, minimise disease risk, and increase nitrogen availability. Evidence is presented suggesting that the rapid increase in yield of wheat in the last two decades has likely arisen from the rapid adoption of new technologies. For productivity to be maintained in the face of the increasing requirement to be environmentally sustainable will be a challenge and will require better integration of breeding and agronomy.