The seed bank is an important mechanism for the persistence of species in ephemeral wetlands, but grazing by domestic stock may change the seed bank and in turn the capacity of the system to recover from disturbance. The sediments of two areas in Thegoa Lagoon (Murray - Darling Basin), one area grazed by sheep when dry and the other ungrazed, were examined. The objective of the study was to determine whether and how the (1) germinable seed bank and (2) final plant communities differ between the grazed and ungrazed areas. The seed banks were subjected to one of the following three water depths: 5 cm above the surface of the water, 5 cm below the surface and 50 cm below the surface. The composition of the seed bank was determined by using the seedling-emergence technique for 12 weeks, with seedlings removed every 2 weeks. The final plant communities were determined at 12 weeks without removing seedlings. The seed bank from the grazed area had a significantly lower seed density (5600 +/- 593 seedsm(-2)) and species richness (7 species) than the ungrazed area (37 683 +/- 4492 seeds m(-2), 16 species) (ANOVA: F-1,F-10 = 50.16, P < 0.0001). The floristic composition of the seed bank was also significantly different between the areas (NPMANOVA: F-1,F-10 = 15.44, P=0.0032). Glinus lotoides was in higher abundance in the grazed area and Alternanthera denticulata, Persicaria lapathifolium, Polygonum plebium, Typha domingensis and Centipeda cunninghamii in the ungrazed area. Similarly, the final communities derived from the grazed and ungrazed areas were significantly different from each other (NPMANOVA: F-1,F-10 = 15.53, P = 0.0032). Greater numbers of Centipeda cunninghamii were present in the community from the grazed area and Alternanthera denticulata and Cuscuta campestris were present in larger numbers in the community from the ungrazed area. Water depth also had an impact on germination; no germination occurred in seed banks flooded to 50 cm and one Typha domingensis seedling was observed in a sample flooded to 5 cm. These results showed that grazing reduces the density and species richness of the seed bank and in turn changes the plant communities derived from the seed bank; however, if grazing is removed pest plants such as Cuscuta campestris may require control. In addition, managed drawdown or water-level fluctuations are important in exposing wetland sediments and allowing for species to recruit from the seed bank.