The coat of the Australian Shepherd is medium in length, but is never so long as to obscure the clean-cut outline of the dog nor so short as to appear to be smooth. It is straight to slightly wavy, laying flat. The coat should not stand straight up off the body.

The guard hairs of the outer coat are moderate in texture and are weather resistant. The undercoat is soft and dense, creating additional protection from the elements. The seasonal absence of the undercoat during spring and summer and in very warm climates is normal and acceptable. Females will shed coat in relation to hormonal changes of their heat cycles and after whelping a litter.

Longer hair may appear as a ruff that will be more accentuated in males than females, as feathering on the back of the forelegs, and as breeches on the back of the thighs.

The hair on the face, outside of the ears, front of the forelegs and the area below the hocks is shorter.

Trimming of the ears, legs, hocks and feet to tidy up the overall appearance is acceptable, but in general this is a breed that should be shown in a natural coat. Whiskers are used in the every day stock work and trimming of whiskers in a herding breed is discouraged.

In evaluating coat, the most important concern is ensuring that the overall coat type is correct.

Non-typical coats are severe faults.

Non typical coats would include:
Excessively long (tangles and collects debris while working stock, detracts from breed type)
Excessively short (offers no protection, detracts from breed type)
Curly (detracts from breed type)
Wiry  (detracts from breed type)
Fluffy, Stand out (reduced protection)