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Abstract This review summarizes recent research in Australia on: (i) climate and geophysical trends over the last few decades; (ii) projections for climate change in the 21st century; (iii) predicted impacts from modelling studies on particular ecosystems and native species; and (iv) ecological effects that have apparently occurred as a response to recent warming. Consistent with global trends, Australia has warmed ∼0.8°C over the last century with minimum temperatures warming faster than maxima. There have been significant regional trends in rainfall with the northern, eastern and southern parts of the continent receiving greater rainfall and the western region receiving less. Higher rainfall has been associated with an increase in the number of rain days and heavy rainfall events. Sea surface temperatures on the Great Barrier Reef have increased and are associated with an increase in the frequency and severity of coral bleaching and mortality. Sea level rises in Australia have been regionally variable, and considerably less than the global average. Snow cover and duration have declined significantly at some sites in the Snowy Mountains. CSIRO projections for future climatic changes indicate increases in annual average temperatures of 0.4–2.0°C by 2030 (relative to 1990) and 1.0–6.0°C by 2070. Considerable uncertainty remains as to future changes in rainfall, El Niño Southern Oscillation events and tropical cyclone activity. Overall increases in potential evaporation over much of the continent are predicted as well as continued reductions in the extent and duration of snow cover. Future changes in temperature and rainfall are predicted to have significant impacts on most vegetation types that have been modelled to date, although the interactive effect of continuing increases in atmospheric CO 2 has not been incorporated into most modelling studies. Elevated CO 2 will most likely mitigate some of the impacts of climate change by reducing water stress. Future impacts on particular ecosystems include increased forest growth, alterations in competitive regimes between C3 and C4 grasses, increasing encroachment of woody shrubs into arid and semiarid rangelands, continued incursion of mangrove communities into freshwater wetlands, increasing frequency of coral bleaching, and establishment of woody species at increasingly higher elevations in the alpine zone. Modelling of potential impacts on specific Australian taxa using bioclimatic analysis programs such as bioclim consistently predicts contraction and/or fragmentation of species' current ranges. The bioclimates of some species of plants and vertebrates are predicted to disappear entirely with as little as 0.5–1.0°C of warming. Australia lacks the long‐term datasets and tradition of phenological monitoring that have allowed the detection of climate‐change‐related trends in the Northern Hemisphere. Long‐term changes in Australian vegetation can be mostly attributed to alterations in fire regimes, clearing and grazing, but some trends, such as encroachment of rainforest into eucalypt woodlands, and establishment of trees in subalpine meadows probably have a climatic component. Shifts in species distributions toward the south (bats, birds), upward in elevation (alpine mammals) or along changing rainfall contours (birds, semiarid reptiles), have recently been documented and offer circumstantial evidence that temperature and rainfall trends are already affecting geographic ranges. Future research directions suggested include giving more emphasis to the study of climatic impacts and understanding the factors that control species distributions, incorporating the effects of elevated CO 2 into climatic modelling for vegetation and selecting suitable species as indicators of climate‐induced change.