In this paper we synthesise existing palaeoenvironmental data from the arid and semi-arid interior of the Australian continent for the period 40-0ka. Moisture is the predominant variable controlling environmental change in the arid zone. Landscapes in this region respond more noticeably to changes in precipitation than to temperature. Depending on their location, arid zone records broadly respond to tropical monsoon-influenced climate regimes, the temperate latitude westerly systems, or a combination of both.The timing and extent of relatively arid and humid phases vary across the continent, in particular between the westerly wind-controlled temperate latitudes, and the interior and north which are influenced by tropically sourced precipitation. Relatively humid phases in the Murray-Darling Basin on the semi-arid margins, which were characterised by large rivers most likely fed by snow melt, prevailed from 40ka to the Last Glacial Maximum (LGM), and from the deglacial to the mid Holocene. By contrast, the Lake Eyre basin in central Australia remained relatively dry throughout the last 40ka, with lake high stands at Lake Frome around 35-30ka, and parts of the deglacial period and the mid-Holocene. The LGM was characterised by widespread relative aridity and colder conditions, as evidenced by extensive desert dune activity and dust transport, lake level fall, and reduced but episodic fluvial activity. The climate of the deglacial period was spatially divergent. The southern part of the continent experienced a brief humid phase around ~17-15ka, followed by increased dune activity around ~14-10ka. This contrasts with the post-LGM persistence of arid conditions in the north, associated with a lapsed monsoon and reflected in lake level lows and reduced fluvial activity, followed by intensification of the monsoon and increasingly effective precipitation from ~14ka. Palaeoenvironmental change during the Holocene was also spatially variable. The early to mid-Holocene was, however, generally characterised by moderately humid conditions, demonstrated by lake level rise, source-bordering dune activity, and speleothem growth, persisting at different times across the continent. Increasingly arid conditions developed into the late Holocene, particularly in the central arid zone.