Land use without adequate management can drive environmental degradation. Grazing management is an example of such land use and represents a common problem in many regions of the world. The aim of this short course is to raise awareness of the environmental risks associated with unsustainable management of natural resources. This course uses Iceland as a case study because here traditional sheep grazing has been associated with extensive environmental degradation. We examine the sustainability of sheep grazing in Iceland and explore how history, socioeconomic factors and environmental conditions have influenced the management of grazing resources. The development of sustainable management practices needs to take into account ecological, as well as economic and social aspects. We can devise general rules and guiding principles for management based on our current understanding of the socio-ecological systems, but fine-tuning of specific management decisions, for example regarding stocking rates or the duration of the grazing season will have to be site-specific. A better understanding of the consequences of these practices and how their ecological impacts vary under different environmental conditions will improve management decisions and increase the sustainability of management practices in the face of ongoing environmental changes.