The yields of wheat and canola in 2 successive years with and without the development of a perched watertable were compared in the high rainfall zone of south-western Australia. In 2001, no perched watertable was observed and wheat and canola yields were close to their estimated potentials. In 2002, a perched watertable developed at less than 30 cm below the soil surface for more than 8 days and at less than 50 cm below the soil surface for at least 40 days at the tillering stage of wheat and at the rosette stage of canola. The air-filled porosity of the soil fell below the critical value of 10% at 10 and 30 cm depth for about 40 days. This reduced the maximum leaf area index of canola by 46% and of wheat by 30%, and reduced the shoot dry matter of wheat at flowering by 27% and by 40% at podding in canola compared with those in 2001. The growth of the wheat roots was constrained at depths from 50-90 cm from the soil surface in 2002 compared with 2001. However, the roots of canola and wheat were able to grow to at least 1.4 m in both 2001 and 2002. In both years, a much higher proportion (>10%) of roots was present in the clay subsoil compared with previous reports in south-western Australia and enabled the crops to utilise a greater amount of water from the clay subsoil. The wheat yield in 2002 was 37% lower than in 2001 and well below the potential, largely as a result of a reduced tiller number per plant and ears per unit area. Despite the greater reduction in dry matter in canola than in wheat in 2002, the seed yield of canola was 17% higher in 2002 than in 2001. Canola, an indeterminate crop, was able to respond to the late rain that occurred in 2002 compared with 2001 and produced a significantly higher seed number per unit area. In 2002, grain size in wheat was 25% larger than in 2001, but this increase was insufficient to compensate for the yield loss resulting from the fewer ears per unit area. It is concluded that early transient perched watertable induced subsurface waterlogging, and that the subsurface waterlogging can be a major constraint to crop growth in the high rainfall region of south-western Australia, and that reducing waterlogging could be a key to achieving higher crop production.