The term dual-purpose canola describes the use of a canola crop for forage before seed production. It could potentially provide a profitable and flexible break-crop option for mixed farms, but there have been no studies to test the concept in Australia. We investigated the feasibility of using canola in this way in field experiments near Canberra, Australia, from 2004 to 2006, using European winter and mid–late maturing Australian spring canola varieties. Winter varieties sown from early March to mid-April produced 2.5–5.0 t/ha of biomass providing 0.3–3.5 t/ha of high-quality forage grazed by sheep in winter. The spring varieties produced similar amounts of vegetative biomass from April sowing but were unsuited to the earlier March sowing as they flowered in early winter and did not recover from grazing. The canola forage was readily eaten by sheep; alkane-based estimates of diet composition indicated that >85% of the organic matter intake consisted of canola. Canola forage was also highly digestible (86–88%) and Merino hoggets grew at 210 g/day from a dry matter intake of 1530 g DM/day. The canola generally recovered well when grazed in winter before bud elongation. Delays in flowering associated with heavy grazing ranged from 0 to 4 days when grazed before buds were visible, to 28 days if the crop had commenced flowering. Significant delays in flowering (>14 days) associated with winter grazing did not reduce seed yield or oil content when favourable spring conditions allowed compensatory growth. Yield loss was observed when winter and spring conditions were unfavourable for compensatory growth, or if grazing continued too late into spring (late September) irrespective of seasonal conditions. The yield loss was more than offset by the value of the grazed forage and the mean gross margin for dual-purpose canola over the four experiments was $240 to $500 higher than for grain-only canola depending on the value assumed for the forage. The study indicates there is considerable scope to capture value from grazing early-sown canola crops during winter without significant, uneconomic trade-offs with seed yield. Further investigations in other medium to high rainfall environments in southern Australia are warranted.