Perennial wheat could improve grain production systems in Australia by rectifying many environmental problems such as hydrological imbalance, nutrient losses, soil erosion, and declining soil carbon and soil health. There are also potential direct production benefits from reduced external inputs, providing extra grazing for livestock in mixed farming systems, as well as benefits for whole-farm management which may offset lower grain yields. In addition to universal issues of domestication and breeding of perennial wheat, specific challenges for perennial wheat in Australia’s dryland systems will include tolerance of water deficit and poor soil environments, and the risks of hosting foliar pathogens over summer. Temperate perennial forage grasses could indicate the potential distribution and traits required in perennial wheat adapted to more arid environments (e.g. summer dormancy). Several Australian native and exotic perennial relatives of wheat could also provide sources of disease resistance, and tolerance of soil acidity, drought, salinity and waterlogging. Still, several farming systems could accommodate perennial wheat with inconsistent persistence in some environments. While developing perennial wheat will be challenging, there is significant opportunity in Australia for perennial wheat to diversify current cropping options. The risks may be minimised by staged investment and interim products with some immediate applications could be produced along the way.