The town of Gracemere is located on the Capricorn Highway in Central Queensland, Australia, approximately 9 kilometres west of the city of Rockhampton. The town is the administrative centre of the Fitzroy Shire , which covers an area of approximately 6,000 square kilometres, and has a population of 10,170 (ABS 2003 estimate).

The area was first explored by Europeans in 1853, when the Archer Brothers arrived looking for pastures for their sheep. They settled by a small lake, which was named Gracemere in 1855. They also located a suitable landing point for supplies on the nearby Fitzroy River, which later became Rockhampton.

Grazing, particularly of beef cattle, has long been the significant industry of the area. The Gracemere Saleyards, located on the western side of the town, is the largest cattle sales facility in the Southern Hemisphere, and has recently undergone a multi-million dollar upgrade.

Because of the proximity of the town to Rockhampton, Gracemere has become a dormitory town, with many residents commuting the short distance to work in the city.