Rural Australia is beset by a range of difficult, long-term environmental problems impacting on agricultural productivity, biodiversity, public health, and living standards. State intervention can be justified in terms of the public benefits that often flow from remedial and preventative works. While a suite of instruments has been used, intervention has focused on promoting voluntary change using participatory approaches. The National Landcare Program, the billion-dollar Natural Heritage Trust, and establishment of an institutional framework for regional catchment management have been the main mechanisms for delivering government support to private land managers. Recent experience in Australia suggests that state sponsored citizen participation can work. Critical factors identified include separating the roles of regional planning bodies and local organizations; effectively linking regional bodies and local groups; establishing robust, productive agency-community partnerships; adopting benefit-based cost-sharing mechanisms for public investment on private property; and designing flexible policy packages, including economic incentives for landholders to maintain the supply of public benefits.