This examination of the potential ecotoxic effects of the avermectins in temperature pastures grazed by sheep is based on a community approach and is focussed on one important aspect of ecosystem function, the nutrient cycle. Data on the amount and distribution of sheep dung on pastures grazed at different stocking rates indicated that areas of high stocking and sheep camps would be affected by avermectin residues to the greatest extent. Mineral losses from sheep dung which does not contain ivermectin, have been examined to provide a background against which the potential effects of avermectins on nutrient cycling can be appraised. The source of the diet is important; for example, dung from sheep grazing on improved pasture loses sulphur faster, and has higher microbial activity, than that of native pasture, regardless of whether it is fresh or old. Dung-dwelling fauna such as dung beetles and microarthropods are most abundant in areas of high dung concentration and microbial activity is greatest in sheep camps where a large quantity of excreta is voided. However, while there is evidence that avermectin does affect certain of the larger dung-dwelling fauna, little is known of its effects on the smaller invertebrate biota such as free-living nematodes and microarthropods. Calculations for phosphorus budgets on both native and improved pastures indicate that the amount of phosphorus recycled in these systems could be reduced by up to 5% the dosage levels currently recommended for the drug.