This paper presents an overview of research that has recently been conducted on the northern Australian rangelands. The research has focussed on conceptualising and measuring the current capacity of cattle producers to adopt new strategies so as to better adapt to the impacts of climate change. The capacity to adapt is defined as comprising four essential elements: (i) managing risk and uncertainty, (ii) possessing strategic skill sets such as planning, experimenting, refining and learning, (iii) psychological and financial buffers, and (iv) an interest in change. However, there appears to be a lack of sufficient capacity currently existing within the industry to meet the challenges of the future: only 16% of producers are regarded to be sufficiently adaptive. Research also highlights that adaptive capacity can be enhanced, and here we highlight those factors that are known to influence adaptive capacity either positively or negatively. Producers with strong networks and trust in informal and formal connections, a strong locus of control, larger properties, a focus on profitability, and use technology, are more likely to persist within the industry through time. We propose that investing in the capacity of producers to better cope and adapt to change is a most logical approach to ensuring both the sustainability of the industry and of the rangelands. A range of strategies are proposed that may enhance adaptive capacity.