Divestiture activities arise when a firm sells part of its assets. Economic theory dictates that in a rational market such activity is wealth maximizing. This study considers the impact of divestiture on share price returns for Australian capital markets from June 1974 to June 1984. In general the sample of divesting firms recorded poor performance when measured relative to the Market Model. Only sell-off divestitures were associated with positive abnormal returns during the twelve months preceeding disclosure in the annual accounts. This movement in share price returns was not statistically significant.