The Australian Constitution lays down a process for creating new states out of the existing states that form the Australian Federation. This article explores that process, in historical and political perspective. It examines the drafting of the relevant provisions of the Constitution, and legal uncertainties that arise from them, including as to what terms and conditions might be imposed by the Commonwealth, and whether a referendum is required to create a new state in this way. The article then examines attempts to bring about new states from Australia’s existing states, before considering proposals for constitutional reform. It demonstrates how an apparently dynamic set of constitutional provisions have given rise to a static Federation in which there is no realistic prospect that a new state will be formed out of an existing state in the near future. The article suggests, however, that in the longer term there is a better prospect that new states will be formed from existing states if proposals for constitutional reform are adopted.