This study investigates the way students and academics in Higher Education understand the notion of graduate 'employability', along with changes within the graduate labour market. The issue of 'employability' has been very much at the forefront of education and employment policy in recent times, particularly in light of the view that we are moving towards a knowledge-driven economy. This study uses a qualitative approach based on semi-structured interviews with fifty-two undergraduate students from a range of different departments in an 'old' university, and twenty-one academics chosen to represent the main disciplines in the study. The study examines the way students perceive the current labour market for graduates, and position themselves within the wider discourse of employability. It further explores the different orientations, attitudes and aspirations students are developing around work and careers. The perceptions of university academics around the issue of graduate employability, and their perceived role in the production of graduates, is also analysed and discussed. The findings suggest that employability is now becoming an organising principle in the way students understand future career progression and manage their expectations. Students view the role of their educational credentials as changing in the context of mass Higher Education and a competitive and congested graduate market. The study further illustrates the ways students orientate themselves to future employment, in terms of the types of goals, attitudes, values and identities they are developing around work and careers. This appears to be influencing the way they manage their future employability and labour market expectations. The data from the academics suggests that many feel their role is changing through mass Higher Education and the changing nature of student learning. Their views on graduate employability are largely based on their values and understanding of the cognitive structures of Higher Education. The findings of this study have implications for future policies of employability within the wider discourse of the knowledge-driven economy.