The question of the origins of the pastoral system of fanning in Canterbury has been debated since the early 1850s. Some have proposed that Canterbury's pastoralists followed British practices, and others have been more specific and promoted the influence of the Scots in the creation of the system. However, the consensus of most writers on the subject has been that pastoralism in New Zealand was simply an extension of the Australian industry. This thesis demonstrates that most of the methods practised by the early Canterbury pastoralists had their origin in the hill districts of the British Isles. However, they also adopted Australian methods for handling large mobs of sheep. The influx of Scottish shepherds in the early 1860s helped to refine the system that was already in place. Pastoralism in Canterbury was not unique. It was part of an international economic system. Ideas, techniques, technology and the sheep were imported from elsewhere. Nevertheless, the local system was created on the ground in the region. Some elements of the system were imported, some imported methods were reshaped to suit local needs, and local innovation played a part in fashioning a local variant of a widely practised pastoral system. The interplay among three key factors was critical in the development of pastoralism in Canterbury. Victorian middle-class values of self-improvement, wealth creation and hard work, fashioned the entrepreneurial ethos of the early pastoralists. They came to Canterbury because they saw an opportunity to make money and to improve their lot. This attitude made the pastoralists responsive to the marketplace; they were quick to alter their production to meet changes in demand. Thirdly, Canterbury's environment created opportunities and provided constraints on what pastoralists could produce and how they could produce it.