Sodic soils, which are widespread in Australian wine growing regions, restrict plant performance through poor soil and water and soil and air relations. In the northern Goulburn Valley of Victoria, an experiment was conducted from 1995 to 1998 in a vineyard block established with Chardonnay on Ramsey rootstock in 1972. The experiment was to improve root growth and vine performance by minimising hardsetting and crusting of the surface soil and decrease its susceptibility to waterlogging by improving water flow into the sodic subsoil. The factorial combinations of gypsum or no–gypsum and wheat straw or ryegrass were applied to the vine line in a randomised block design. The improvement in grapevine performance was attributed to improved soil conditions for root growth and water movement. Soil electrical conductivity (EC) to 500 mm depth was increased by at least 36%, about 15 months after application of 12 t/ha gypsum, and the effect was maintained at least 40 months after application. The increase in EC was associated with a decrease in spontaneous dispersion at these depths. The application of wheat straw to gypsum–treated soil decreased EC by 52% at 200–300 mm depth but concentrations of water–soluble plus exchangeable Ca2+, Mg2+ and total cations were unaffected. The contributions of water–soluble plus exchangeable Ca2+, and water–soluble plus exchangeable Mg2+ by wheat straw to soil (not gypsum–treated) at 200–300 mm depth were apparent, as concentrations were similar to those in gypsum–treated soils without wheat straw. Forty months after application of gypsum, the exchangeable sodium percentage (ESP) was decreased by at least 26% at a depth of at least 500 mm depth. Spontaneous dispersion was greater in soil with wheat straw applied at 0–100 mm depth than in soil with ryegrass grown, and reflects the influence of organic anions from decomposing wheat straw and the ability of ryegrass to stabilise soil. The stabilising ability of gypsum and ryegrass is reinforced by the greater depth of soil maintained at less than 1 MPa penetration resistance in these treatments, as well as an increase in hydraulic conductivity.