On average, Australia is a dry continent with many competing uses for water. Hence, there is an urgent need to know actual evapotranspiration (ETa) patterns across wide areas of agricultural and natural ecosystems, as opposed to just point measurements of ETa. The Australian Government has tasked the science agencies with operationally developing monthly and annual estimates of ETa and other hydrological variables, and with forecasting water availability over periods of days to decades, as part of its national water assessment programme. To meet these needs, Australian researchers have become leaders in developing large-area methods for estimating ETa at regional and continental scales. Ground methods include meteorological models, eddy covariance towers, sap flow sensors and catchment water balance models. Remote sensing methods use thermal infrared, mid infrared and/or vegetation indices usually combined with meteorological data to estimate ETa. Ground and remote sensing ETa estimates are assimilated into the Australian Water Resource Assessment, which issues annual estimates of the state of the continental water balance for policy and planning purposes. The best ETa models are estimated to have an error or uncertainty of 10% to 20% in Australia. Developments in Australian ETa research over the past 20 years are reviewed, and sources of error and uncertainty in current methods and models are discussed.