The sheep grazing tolerance of a diverse range of lucerne germplasm (Medicago sativa subspp. sativa, falcata and caerulea) was investigated at Roseworthy in South Australia. Lucerne entries were established on a sandy loam soil in 1998 and managed with rotational grazing management for the first 12 months. Continuous grazing by sheep in the following year reduced the plant density of each entry as measured by plant frequency estimates by 2–98%. Lucerne was allowed to recover, then grazed continuously for another 12 months. There was great diversity in tolerance to sheep grazing among the entries tested, with final plant frequency ranging from 0–13% for highly winter-active entries, 7–23% (at least 7–23 plants/m²) for winter-active entries and 11–40% for winter dormant entries. A grazing tolerance index of commercial cultivars was determined by comparing their plant frequency decline under continuous grazing to that under rotational grazing in an adjacent experiment. Australian-bred highly winter-active cultivars displayed a greater level of tolerance than those developed overseas. The superior performance of several breeders’ lines in the continuously grazed trial indicates there is further scope for improvement with selection and breeding.