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Using data from previous studies, we tested two hypotheses about the impacts of grazing in a naturally heterogeneous landscape in arid central Australia: (1) that grazing leads to net change of resources at a paddock or landscape scale, and (2) that water and nutrients remain coupled as they move through the landscape. We found that key nutrients were likely to be lost at the landscape scale as grazing increased, rather than just being redistributed. Water infiltration increased but runoff was probably lost more readily due to the lack of barriers to flow. Water and nutrients were largely decoupled. We surmised that any increased production in drainage lines capturing runoff did not compensate for lost production on surrounding slopes. Recovery was unlikely to be spontaneous and would depend on reconstructing the landscape's natural heterogeneity and managing grazing carefully. Options for intervention would be constrained by cost.