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Australia is among one of the world’s wealthiest nations; yet, its relatively small human population (22.5 million) has been responsible for extensive deforestation and forest degradation since European settlement in the late 18th century. Despite most (∼75%) of Australia’s 7.6 million-km2 area being covered in inhospitable deserts or arid lands generally unsuitable to forest growth, the coastal periphery has witnessed a rapid decline in forest cover and quality, especially over the last 60 years. Here I document the rates of forest loss and degradation in Australia based on a thorough review of existing literature and unpublished data.Overall, Australia has lost nearly 40% of its forests, but much of the remaining native vegetation is highly fragmented. As European colonists expanded in the late 18th and the early 19th centuries, deforestation occurred mainly on the most fertile soils nearest to the coast. In the 1950s, southwestern Western Australia was largely cleared for wheat production, subsequently leading to its designation as a Global Biodiversity Hotspot given its high number of endemic plant species and rapid clearing rates. Since the 1970s, the greatest rates of forest clearance have been in southeastern Queensland and northern New South Wales, although Victoria is the most cleared state. Today, degradation is occurring in the largely forested tropical north due to rapidly expanding invasive weed species and altered fire regimes. Without clear policies to regenerate degraded forests and protect existing tracts at a massive scale, Australia stands to lose a large proportion of its remaining endemic biodiversity. The most important implications of the degree to which Australian forests have disappeared or been degraded are that management must emphasize the maintenance of existing primary forest patches, as well as focus on the regeneration of matrix areas between fragments to increase native habitat area, connectivity and ecosystem functions.