Extreme Quaternary climatic variation in Australia brought radical environmental changes to various parts of the continent. In this article, I discuss these changes in terms of mega-lake development in Central Australia, and in particular the southern Lake Eyre Basin (SLEB). The formation of these features, together with the fossil record of the region, throws light on the palaeoclimatic and palaeobiological relationships of megafauna and other animal groups, and the trophic development required to support them. Australian continental drying during the late Quaternary has been noted by many workers, but this process was punctuated by strong pluvial episodes of decreasing strength from MIS 5e. Mega-lake development during MIS 5 resulted from unusual monsoonal and evaporative patterns at that time. However, the climatic forcing behind mega-lake formation and the rate of lake growth is not well understood, although species composition in SLEB aquatic fossil fauna assemblages attests to the size and development of these lakes and indicates their long-term persistence. The degree of trophic development and the maintenance of broad, well-bedded aquatic and terrestrial ecological frameworks and biotic variety support that conclusion. The fossil record contributes to our understanding of mega-lake and palaeoriverine trophic complexity, the speed and duration of lake-fill and the intensity and persistence of the supporting intracontinental moisture balance. Although other more remote mega-lakes formed in Central Australia, they were not populated by complex trophic systems or megafauna populations. This discrepancy between the various geographic areas sheds light on the biogeography and population distribution of megafauna, thus helping form a better picture of the reasons behind the final extinction of relict populations of this group in MIS 4.