Spatial and temporal patterns in lake-level data from 38 sites in Australia and Papua New Guinea provide a basis for reconstructing changes in water balance and atmospheric circulation during the past 30,000 years. The reconstructions are consistent with hydrological changes inferred from pollen analysis and palaeowind directions inferred from dunes. Generally wetter conditions between 30,000 and 24,000 BP are consistent with a strong Walker Circulation with the STA near its present position. General aridity at the glacial maximum until 12,000 BP with higher than present lake levels in the southeastern interior of Australia, implies that the southern margin of the subtropical anticyclone belt was expanded southward and the southern Westerlies were correspondingly displaced. This southward shift appears in all GCM simulations of the 18,000 BP climate and may be a result of the increased vigour of the northern hemisphere circulation. A northward migration of the belt of high lake levels between 11,000 and 6000 BP suggests that the STA shifted back equatorward to north of its present position. Relaxation to modern conditions occurred after 6000 BP interrupted by an unexplained dry phase (6000-5000 BP) in Tasmania and Queensland.