Over more than a century there has been debate about the interactions of kangaroos and introduced domestic stock, especially sheep, in the semi-arid and arid rangelands. The potential for competition between the species is still controversial, with pastoralists generally assuming that exploitative competition is a continuing feature of the rangelands, with competition by kangaroos leading to reduced stock production and carrying capacity. The current scientific consensus is that in the arid rangelands such competition is not common and occurs largely during dry periods when pasture is sparse. Competition is probably most persistent in more degraded environments. There is still debate on the level of impact of kangaroos on sheep productivity in those situations where competition does occur. Departments of Agriculture consider that a kangaroo has the competitive impact equivalent to 0.7 sheep ( in dry sheep equivalents or DSE); however, this value is not supported by most current data. A value for the competitive impact of kangaroos per kg body weight of approximately 0.6 DSE translates into 0.4 DSE when body size is taken into account, kangaroos being much smaller on average than sheep, particularly in harvested populations. There are still questions to be resolved about the appropriate DSE value in harvested populations because age reduction produces a population that is actively growing and which may have high metabolic costs (teenagers). Despite this complication we suggest that a DSE of 0.4 per individual kangaroo is still an appropriate assumption. Real competitive impacts of kangaroos on stock will depend on season and rangeland condition. If rangeland health is satisfactory competition will occur only in dry times.