Australia’s marine life is highly diverse and endemic. Here we describe projections of climate change in Australian waters and examine from the literature likely impacts of these changes on Australian marine biodiversity. For the Australian region, climate model simulations project oceanic warming, an increase in ocean stratification and decrease in mixing depth, a strengthening of the East Australian Current, increased ocean acidification, a rise in sea level, alterations in cloud cover and ozone levels altering the levels of solar radiation reaching the ocean surface, and altered storm and rainfall regimes. Evidence of climate change impacts on biological systems are generally scarce in Australia compared to the Northern Hemisphere. The poor observational records in Australia are attributed to a lack of studies of climate impacts on natural systems and species at regional or national scales. However, there are notable exceptions such as widespread bleaching of corals on the Great Barrier Reef and poleward shifts in temperate fish populations. Biological changes are likely to be considerable and to have economic and broad ecological consequences, especially in climate-change ‘hot spots’ such as the Tasman Sea and the Great Barrier Reef.