Herbicide resistant weeds are having a major impact on Australian agriculture. The most important of these is ryegrass ( Lolium rigidum). In response to this new problem, ‘genetic engineering’ techniques are being used to create new types of ‘transgenic’ lupins which are resistant to non-selective herbicides to which the ryegrass is not resistant. In this study the economic value of such a herbicide-resistant lupin variety is investigated using a multiperiod bioeconomic model. The model represents a common cropping system of Western Australia in which winter crops of wheat and lupins are grown in alternate years. The ryegrass population is modelled as being completely resistant to traditionally-used selective herbicides. The net profits for a wide range of weed control measures (both chemical and non-chemical) used separately and in combination with a transgenic lupin were compared with the current options available to farmers. The best integrated strategy involving a transgenic, glufosinate-resistant lupin was found to have a similar profitability to a system based on current lupin varieties employing paraquat for in-crop spraying. However, if a glyphosate-resistant lupin were to be developed and used in conjunction with technology for physical collection or destruction of weed seeds, it was estimated that farm profits would increase by 33%.