The consequences of human activities increasing concentrations of atmospheric greenhouse gases are already being felt in marine and terrestrial environments. More energy has been trapped in the global climate system, resulting in warming of land and sea temperatures. About 30% of the extra atmospheric carbon dioxide has been absorbed by the oceans, increasing their acidity. Thermal expansion and some melting of land-based ice have caused sea level to rise. Significant climate changes have now been observed across Australia and its coastal seas. The clearest signal is the warming of air and sea temperatures and the rates of warming have accelerated since the mid-20th century. Ocean warming has been higher than the global average around Australia, especially off south-eastern Australia. Changes in Australia's hydrological regime are more difficult to differentiate from the high natural inter-annual variability. Recent trends towards drier winters in south-western Western Australia and part of southern Australia appear, however, to be largely attributable to human-induced climate change. Even without significant changes in average rainfall, warmer temperatures increase evaporative losses, enhance the intensity of recent droughts and reduce river flows. Sustained and coordinated monitoring of the physical environment, especially lacking for Australia's freshwater ecosystems, is important to assess the magnitude and biological consequences of ongoing changes.