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Improving the reproductive performance of sheep is a national research priority, but identifying which components of the reproductive process should be the highest priority for further research is complex. The analysis reported in this paper tested the hypothesis that research areas can be prioritised using knowledge of potential gains and bio-economic modelling of critical control points. The analysis was carried out in two parts and the control points included increasing conception, increasing survival of single- or twin-born lambs, increasing survival of ewes at lambing, increasing weaner survival and increasing early reproductive success. For each control point, four productivity levels were examined and the average change in profit per unit of change in the control point per animal was calculated for three flock types. The second component quantified the potential industry gain from the change in profit per unit in each control point, the potential for change (number of units) and the potential adoption (number of ewes or weaners). On the basis of the assumptions used, increasing survival of twin-born lambs was the area with the highest pay-off and had an estimated value of AU$515 million. The value of increasing twin-lamb survival compared with single-lamb survival was affected by the proportion of single- and twin-bearing ewes in the flock. In a flock based on maternal ewes, there are relatively more twin-bearing ewes, so increasing twin survival was a higher priority than for flocks based on Merino ewes in which the proportion of twins was lower. The analysis suggested that the second most important area for future research was improving reproduction from ewe lambs with a pay-off of AU$332 million, followed by improving survival of ewes AU$303 million, improving survival of single born lambs AU$285 million, improving the number of lambs conceived AU$235 million, improving reproduction from 2-year-old ewes AU$221 million and, finally, improving weaner survival AU$52 million. The priorities determined using this method were robust and varying the assumptions of the bio-economic analysis had little impact on the priorities. There was no change in the overall ranking of the critical control points from either increasing the meat or wool price by 20% or altering the flock structure of the Merino flock. Therefore, we can be confident that the priorities determined in the present analysis with current prices and production systems will be valid in to the future.