Herbage allowance (HA) impacts performance of grazing cattle as well as sward structure and herbage yield. The objective of the current study was to compare average daily gain (ADG) of Nellore steers on Marandu palisadegrass (Brachiaria brizantha (Hochst ex A. Rich.) Stapf. cv. Marandu) pastures in response to HA. Treatments were applied as 5, 10, 15 and 20 kg dry matter (DM) per 100 kg live weight (LW) per day HA5, HA10, HA15 and HA20), in rotationally stocked pastures under a 35-day grazing cycle (28 days of rest and 7 days of grazing). The trial was carried out in Pirassununga, Brazil, during two summer seasons in 2003 and 2004, each divided into four grazing cycles. Individual animal (250 kg yearling steers) gain increased with HA up to HA15 (mean=0·69 kg/head per day) during each of four grazing cycles per year. The 2-year gain per area was greater for HA5 and HA10 than for HA15 and HA20 and average stocking rate was 9·6, 6·7, 5·4 and 4·6 head/ha for HA5 to HA20, respectively. In addition to the effects of HA on ADG, changes in sward structure, especially sward height, help to explain variation in daily gain in both years. The HA10 treatment provides higher gain per area without excessively reducing individual animal performance, and thus may be the level of choice for optimizing animal output in pasture-only systems.