\" The Australian sheep industry and its associated research and development agencies recently developed a funding proposal for the Cooperative Research Centre (CRC) for Sheep Industry Innovation. The stringent assessment criteria set by the Commonwealth Government require the use of a formal economic modelling framework to estimate the expected benefits from the proposed program of research. The purpose of this paper is to describe the modelling framework developed for the evaluation and to report the results of that assessment. Top-down and bottom-up economic evaluation procedures were used to assess the expected economic benefits. Formal with-CRC and without-CRC scenarios were defined for both wool and sheep-meat and for each research theme. Relevant costs were similarly defined. Thus, the requested investment by the Commonwealth and the Australian sheep industry in the CRC was assessed relative to a scenario where an alternative, lower cost research program into this industry is implemented. The extra resources provided by the Commonwealth funding are assumed to have a discounted value of about $34 million over the 25-year period of this evaluation. These resources are sufficient to allow some new research components to be added to the portfolio, some existing components to produce better outcomes, and a more targeted approach to development and extension that speeds up and increases the adoption of the new technologies that are generated by the research program. The benefit from this extra investment and consequent research effort is estimated to be worth about $518 million in present value terms, which is far in excess of the marginal investment of $34 million. Thus every $1 of these extra resources brought into the Australian sheep industry through funding the proposed CRC is expected to return almost $14 to the industry in present value terms. Disaggregating the estimates by region and market group shows that almost two-thirds of the anticipated benefits (about $824 million) will be claimed by Australian sheep producers and Australian consumers of sheep products. Disaggregating the estimates by type of impact shows that more than $300 million can be attributed to the proposed accelerated adoption program. This is some 22 per cent of the total estimated benefit. The paper concludes by recording several lessons learnt arising from this particular application. \"