Perinatal mortality of lambs is on average 20% of lambs born in extensive Australian grazing systems, constituting a substantial production loss and welfare concern. Hypoxia resulting from prolonged or difficult births contributes to lower rates of lamb survival, and caffeine may reduce the effects of hypoxia. This study evaluated whether oral supplementation of grazing ewes with caffeine could improve lamb survival. Pregnant Merino ewes (n=492) which had been naturally mated to Merino rams in February/March were allocated to three replicates of control (no caffeine) or caffeine treatments. Caffeine was fed daily in troughs in each paddock at a rate of 1.6 g/ewe per day (estimated at 20 mg/kg live weight) from the day before the first lamb was born, for 14 days, with lambing continuing for 6 weeks. Intake was facilitated using 320 g/day per ewe of barley grain with molasses, which was fed to both treatments. The proportion of lambs born alive during the period of supplementation did not differ (P>0.05) between treatments. The proportion mortality of lambs to 1 day of age was lower (P=0.029) in the caffeine (0.01) compared with the control (0.16) treatment for lambs born during the 1st week of supplementation, but not in later weeks. This difference in mortality for lambs born in the 1st week of supplementation was maintained to marking age (caffeine 0.09; control 0.30; P=0.027). Extreme weather during the 2nd week of supplementation may have prevented any reduction in mortality due to caffeine in that week. Feeding caffeine to a naturally lambing flock of grazing ewes may be a highly effective and commercially practical method of increasing lamb survival, but further research is needed to confirm these results, and caffeine be regulated for use.