This paper reports a use of the real-options valuation methodology to analyze wine grape vineyard investment under price and yield uncertainty. Threshold annual rates of revenue per hectare to trigger entry and exit, respectively, were calculated for three different sizes of wine grape vineyards in northwest Victoria, Australia. The modeling identified lower exit and higher entry triggers than would be indicated by a conventional approach that ignores the uncertainty underpinning adaptive investment decisions. Between these triggers is a relatively wide gap of estimated indeterminacy in vineyard investment that highlights the intertwined influence of numerous economic factors—cost structure, economies of scale, market volatility, transaction costs, and sunk and salvaged asset valuation. Drawing on these determinants of vineyard investment and disinvestment, the paper discusses the role of investment incentives in affecting industry transformation and the scope for policy intervention to assist structural adjustment of the wine grape sector.