Context Soil acidity constrains pasture productivity, limiting production from grazing animals. Lime application can ameliorate acidity, although the rate is increased when incorporated rather than surface applied. Soils in south-eastern Australia are generally highly erodible, containing valuable native grasses that might be lost if disturbed. Surface application is, therefore, the only option, but the extent to which lime can ameliorate acidity and increase pasture and animal production requires research. Aim This 10-year experiment studied three rates of surface-applied lime, two of superphosphate (P) and two stocking rates (SR) on continuously grazed sheep on acidic soils. Two flocks were studied, one from May 1999 to December 2002, and the second from August 2005 to July 2008. We hypothesised that wool production and animal liveweight would increase as (1) lime rate increased, (2) P rate increased, and (3) peak animal productivity would occur under the combination of the highest rates of lime and P. Key results The experiment coincided with the Millennium Drought reducing forage production, and slowing lime movement into the soil and consequent amelioration. During Flock 1, effective SR (dry sheep equivalents (DSE)/ha) of the low P, low SR and limed treatment became higher by 1 DSE/ha for 10 months during the final flock measurement months, as drought intensified. During Flock 2, effective SR of both high P, high SR and limed treatments were greater by 2 DSE/ha than non-limed counterpart for the first 9 months of 2006. Trends of higher animal production under lime became clearer with time, so were more apparent in Flock 2 than Flock 1, and at higher SR. High lime, high P and high SR had the greatest wool production. High P, low SR and nil lime was initially highly productive, but declined sharply when legumes disappeared, associated with soil aluminium toxicity. Lime maintained superior ground cover under drought, reducing the danger of sward death and soil erosion, demonstrating its sward preservation, sustainability and ecosystem service benefits. Implications With the ever-increasing price of land, farmers must increase their land’s productivity. This trial demonstrated production and environmental benefits associated with acid soil amelioration through lime application.