Increasing populations of large carnivores are leading to tension and conflicts with livestock production, a situation that potentially might escalate. In Norway the objective of the large carnivore policy is two-folded: to ensure viable carnivore populations and to secure a sustainable grazing industry. The main instrument is zonation, with carnivore management zones (CMZs) prioritized for reproduction of the large carnivore species separated from other areas prioritized for grazing livestock. The objective of this paper is to describe current knowledge about the impact of the zoning management strategy on the grazing industry. This is done by documenting status and changes in sheep production, losses of livestock to predating carnivores, and the use of grazing areas inside and outside the CMZs. CMZs offering protection for lynx, wolverine, bear and wolf cover 55% of the Norwegian mainland. 30% of the sheep and 50% of the Sami reindeer grazing areas are found inside the CMZs. Livestock (semi-domestic reindeer excluded) is using 59% of the available natural pasture areas outside the CMZs, but only 26% inside the CMZs. The lowest use of available grazing areas was found inside zones for wolves (12%) and brown bears (6%). Livestock in these zones are confined to fenced enclosures, mostly on the farm itself, or moved to pastures outside the management zone for summer grazing. Livestock losses increased in the affected regions during the period when carnivores were reestablished. Later, losses declined when CMZs were established and mitigation efforts were implemented in these zones. The bulk of sheep and reindeer killed by carnivores are now found in boundary areas within 50 km off the CMZs, where sheep are still grazing on open mountain and forest ranges. Therefore, instruments to protect livestock in areas close to the CMZs are also needed. The number of sheep declined inside the CMZs from 1999 to 2014, but increased outside the zones. The reduction in the absolute number of sheep in the CMZs is balanced by a similar increase outside, thus the total sheep production in Norway is maintained. We conclude that although of little consequence for the total food production in Norway, the economic and social impact of the large carnivore management strategy can be serious for local communities and individual farmers who are affected. There is a need for more exact carnivore population monitoring to quantify the carnivore pressure, better documentation of reindeer losses, and a clearer and stricter practicing of the zoning strategy. Increased involvement of social sciences is important in order to understand the human dimension of the carnivore conflicts.