Australian conservation scientists, managers and decision makers must come to grips with anthropogenic climate change, imposed upon an already variable regional climate system. Pre- and postinstrumental records and climate proxies indicate that Australia has experienced wet and dry cycles over intradecadal to millennial time scales. Precipitation variation across Australia is correlated with different climate features but reliable tools for seasonal rainfall prediction are still some years away. Atmosphere-Ocean General Circulation Models predict a widening of the Hadley circulation and strengthening of the Southern Annular Mode, which should result in reduced cool season rainfall over southern Australia. Shifts in the Australian climate over the Holocene epoch, most notably increased ENSO variability after 5 000 years ago, are associated with substantial vegetation change and indicate the speed at which ecosystems may be altered. The CO2 fertilization of plant biomes may mitigate increasing aridity to some extent but, in general, climate change is expected to negatively affect native vegetation and agricultural productivity. Sea-level rise is predicted to be substantial over this century and, when coupled with increased storm intensity, poses threats in the form of erosion, salinization and flooding. The best chance of building adaptable ecosystems and preserving ecosystem services requires the extension, integration and possibly optimization of reserve systems, in concert with improved management of other threatening processes (habitat loss, invasive species, overexploitation, pollution and disease). In addition, a price on carbon dioxide emissions would provide incentives for privately funded reforestation schemes, but additional incentives promoting mixed species over monoculture plantings would be required to assure maximum biodiversity benefits.