Regenerative agriculture is being used by a small number of innovative farmers in Australia and elsewhere, using a range of holistic methods that work with the land and climate, such as short duration time of controlled grazing with long rest periods for the paddock and higher proportions of aboveground biomass, to improve soil health and farm profitability. This paper uses a delta life cycle assessment, focusing only on the differences between regenerative and conventional production systems to assess the potential impact of regenerative agriculture on a full range of midpoint impact categories and end-point areas of protection for an extensive sheep system in Australia. We assess the potential improvement to the water, carbon, and biodiversity footprints of sheep production, and find that regenerative agriculture has the potential to improve environmental performance compared with current industrial agricultural practices. In particular, there seems to be considerable potential to offset a significant proportion of the on-farm climate change impacts through a combination of biosequestration in soils and aboveground biomass and using harvested biomass to offset fossil fuel use. The assessment highlights the need for additional data to confirm the findings and the potential contribution that regenerative agriculture can make to sustainability of ruminant livestock production.