An active transponder system adapted for animal behaviour studies is described, and the potential of the system to facilitate patch scale monitoring of grazing cows is explored. A preliminary experiment examined the effect of presence and colour of loop aerial wires, on the activity of grazing cattle. Results from brown and white aerials pegged on the surface of the ground were compared with those from aerials buried at a depth of 5 cm. There was no effect of colour or burial of aerial on total number of contacts, or in time duration of cows within patches (P>0.001). Further experiments were conducted to examine potential sources of variation in the reading range of aerials. Reading range declined with reduction in aerial size and as the height of the transponder above ground level increased. Detection distance from a square aerial varied according to the transponder direction of approach, whereas direction of approach around the circumference of a circular aerial had little affect on detection distance. Reading range was greatest when orientation of the transponder tag to an aerial was vertical compared to horizontal. Implications of the results for studies of grazing activity are discussed and it is concluded that the field based active transponder system used in this experiment offers potential when recording patch level investigative behaviour of grazing animals. However, the effect of variability in reading range of aerials and potential variability in transponder height need to be considered when interpreting results from a field based active transponder system.