Phalaris (Phalaris aquatica L.) is a valuable perennial grass for grazing and land-care purposes in south-eastern Australia. Population survival is predominantly by clonal spread, whereas seedling recruitment is limited by low longevity in the seedbank, ant seed harvesting, and competition from other species. We examined the possibility that breeding and selection could alter the seed dispersal pattern of phalaris, and that this change would result in an increase in seedling recruitment under reduced competition created by grazing. Using 3 phalaris populations with contrasting degrees of panicle shattering and seed retention, and the commercial cultivar, Holdfast, seed dispersal, seedling emergence, and plant establishment were followed over 3 years at a field site near Canberra, ACT. In 2 of the years, half the experimental area was grazed intensively by sheep for a 4-day period after seed dispersal in early autumn. Consistent differences in the timing of seed dispersal were demonstrated between the early, free seed dispersal of the panicle shattering/non-seed-retaining population and the more prolonged seed dispersal of the seed-retaining populations. The 2 seed-retaining populations had greater seedling emergence and recruitment than cv. Holdfast, but did not attain emergence or recruitment levels of the non-seed-retaining population, possibly because of poorer seed–soil contact. Averaged over populations, more seedlings emerged in the grazed than in the ungrazed area, but the number of established plants at the end of the experiment was similar in the 2 areas. Emerged seedlings were 1–2% of the seed rain in each season, but the proportion of established plants at the end of the third season was less than 0.1% of the seed rain in the third season and 3–5% of the number of seedlings that emerged in the 2 previous years. Final recruitment levels were 1–4 established plants/m². The study confirmed that selection in phalaris populations can produce plants with a more prolonged seed dispersal period, and thus greater potential for seedling recruitment than current seed-retaining cultivars The work suggested that recruitment, while low, has a potential role in the persistence of phalaris pastures, but management of the established pasture base remains the most effective means of maintaining population persistence under commercial grazing.