Penaeid shrimp culture in Australia is a relatively new industry and occurs mainly in the eastern states of Queensland and New South Wales. The major species cultured arePenaeus monodonandPenaeus japonicus, but other penaeids, includingMetapenaeus macleayi,Penaeus esculentus, andPenaeus plebejus, have been cultured in small quantities. Research with Australian penaeids has described the mechanisms of food location, feeding, and digestion (Dall, 1992). The composition of natural prey items of penaeids in the wild has been proposed as a guide to nutritional requirements, and indeed successful diets have some similarities with natural food. The major differences between natural prey for shrimp in the wild and commercial diets is that prey items are higher in ash, while commercial diets have more carbohydrate. Predation on natural food present within farming ponds has been shown to lower requirements for formulated diets during the early stages of pond culture when shrimp biomass is relatively low. More research dedicated to the improvement of the abundance and quality of natural biota as a source of food through fertilization and prevention of pond bottom deterioration is warranted. Studies on protein turnover have identified major differences in protein degradation in shrimp fed diets with different protein contents. Many studies aimed at determining protein requirements of penaeids have used different methods to calculate ‘metabolizable’ energy contents of the diets. However, as none have directly measured digestible or metabolizable energy of test diets, interactions between protein and energy may have confounded interpretation of results. This may explain some of the variation in the conclusions published. The digestive gland has been identified as the primary site for lipid synthesis, storage and assimilation. Regulation of 18:3n-3, 20:4n-6, 20:5n-3, and 22:6n-3 and chain elongation of 18:2n-6 to 20:4n-6 have been documented. Research into alternative protein sources to expensive fish and mollusk meals is underway in Australia. New techniques to determine digestibility of ingredients and net energy utilization should assist in the search for new ingredients and the evaluation of techniques to improve utilization of these ingredients in shrimp diets.