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The settlement of Sahul, the lost continent of Oceania, remains one of the most ancient and debated human migrations. Modern New Guineans inherited a unique genetic diversity tracing back 50,000 years, and yet there is currently no model reconstructing their past population dynamics. We generated 58 new whole-genome sequences from Papua New Guinea, filling geographical gaps in previous sampling, specifically to address alternative scenarios of the initial migration to Sahul and the settlement of New Guinea. Here, we present the first genomic models for the settlement of northeast Sahul considering one or two migrations from Wallacea. Both models fit our data set, reinforcing the idea that ancestral groups to New Guinean and Indigenous Australians split early, potentially during their migration in Wallacea where the northern route could have been favored. The earliest period of human presence in Sahul was an era of interactions and gene flow between related but already differentiated groups, from whom all modern New Guineans, Bismarck islanders, and Indigenous Australians descend. The settlement of New Guinea was probably initiated from its southeast region, where the oldest archaeological sites have been found. This was followed by two migrations into the south and north lowlands that ultimately reached the west and east highlands. We also identify ancient gene flows between populations in New Guinea, Australia, East Indonesia, and the Bismarck Archipelago, emphasizing the fact that the anthropological landscape during the early period of Sahul settlement was highly dynamic rather than the traditional view of extensive isolation., (© The Author(s) 2021. Published by Oxford University Press on behalf of the Society for Molecular Biology and Evolution.)