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Abstract: Australia has not always been arid, and the central desert was once well watered. This paper traces the changes in climate and vegetation, leading to the present aridity. At the beginning of the Cenozoic, continental Australia had a warm and humid climate, and the vegetation was mainly meso–micro-thermal (warm to cool temperate) rainforest. Central Australia experienced seasonal rainfall and there may have been limited aridity in the northwest. By the mid–late Eocene, rainforest in central Australia was restricted to the well-watered valley bottoms, with sclerophyll vegetation on the slopes and ridges. In the latest Eocene–earliest Oligocene, there was an abrupt cooling of ocean waters and the diversity of megathermal angiosperms decreased. The early–mid-Miocene was warm–humid and there was a considerable diversity of forest types. Woodlands and Casuarinaceae forests became more common. Central Australia was seasonal, with a very warm season of high evaporation. In Western Australia, regular flows in the palaeodrainage systems had stopped by the mid-Miocene and this marked the first major step towards aridity. The late Miocene was cool and dry, with a major reduction of rainforests and an increase of Eucalyptus/casuarinaceous sclerophyll forests in inland southeastern Australia. Regular burning became a feature of the eucalypt forests. Rainforest persisted, however, along the east coast and highlands of Australia. Central Australia became more arid with dry woodland and chenopod shrublands. Rainforests continued to decrease during the Pliocene and grasslands developed in central northern Australia. By the early Pleistocene, the modern climatic regime had been established, but precipitation was higher than today. Cycles of open, shrubland/grasslands/herbfields and wooded vegetation accompanied the arid glacial and humid interglacial cycles (respectively). About 0.5Ma, there was a change to a drier climate, but it was still wetter than today. The last glacial period was particularly harsh, and the present interglacial period is drier than the previous interglacial. Aridity has thus increased in a number of steps, following the first major step towards aridity in the early Miocene. Distinctive elements of the vegetation can be traced back to times when the arid zone was humid and supported rainforest. The elements, which have remained in arid regions, are the few that could tolerate or adapt to the drier climates. The taxa, which could not cope with these changing conditions, were eliminated from the arid regions. [Copyright &y& Elsevier]