Nationally the dairy industry is the largest agricultural user of irrigation water. The current drought in eastern Australia, and government policy to increase environmental flows in rivers, have highlighted the importance of utilising water as efficiently as possible. Pasture production accounts for up to 35% of variability in farm profit. Species selection and management may have significant impact on water use efficiency (WUE) and farm profitability. In this context, thirty five of the most commonly used dairy forages, and some more exotic ones, are being evaluated for WUE in terms of mega joules metabolisable energy (MJ ME) per mm of water applied, in a large replicated experiment on a clay alluvial soil (Brown Dermosol), near Sydney. Data from the first summer experiment showed that Maize significantly out yielded all other species by up to 60%. Maize was also twice as efficient in using water in terms of MJ ME/ mm water in comparison with perennial ryegrass, cocksfoot and prairie grass. The C-4 plants maize, sorghum and kikuyu significantly produced more dry matter yield and had higher WUE than all C-3 plants (eg perennial ryegrass) over summer. The deepest water extraction was achieved by lucerne and chichory, as water was extracted down to 175 cm in the first summer, while white clover only extracted water from the top 100 cm. It appears both rooting pattern and metabolic pattern (C-3 or C-4) pathway are important factors influencing WUE.