Australia's rich history begins with the arrival of Indigenous peoples, who have inhabited the continent for an estimated 50,000 to 65,000 years. These peoples, including Aboriginal Australians and Torres Strait Islanders, developed diverse cultures deeply connected to the land. Aboriginal Australians lived in complex societies, with practices such as fire-stick farming, fish farming, and semi-permanent shelters. They maintained a rich cultural heritage passed down through oral traditions, songs, dance, and paintings. Torres Strait Islanders, who settled their islands over 2,500 years ago, developed seafaring skills and seasonal horticulture. These Indigenous groups thrived in different ways, often through trade and cultural exchange, such as interactions with Makassan trepangers from Indonesia.

European exploration began in the early 17th century with Dutch explorers like Willem Janszoon, who first landed on Australia's shores in 1606. Following this, Abel Tasman explored Van Diemen's Land (now Tasmania) in 1642. The Dutch mapped much of the northern and western coasts of Australia, naming the continent "New Holland." However, it wasn't until 1770 that British explorer Captain James Cook mapped the east coast of Australia and claimed it for Great Britain, naming it "New South Wales."

In 1786, the British government announced its plan to establish a penal colony in New South Wales. The First Fleet, led by Captain Arthur Phillip, arrived at Port Jackson on 26 January 1788, marking the beginning of British colonisation. This date would later become Australia's national day. The early settlers were mostly convicts, many of whom were assigned as labourers to free settlers. Over time, emancipated convicts integrated into society, but the relationship between settlers and Indigenous peoples was strained. Conflicts, disease, and dispossession of land led to a significant decline in the Indigenous population.

As European settlement expanded across the continent, new colonies were established. In 1803, a settlement was founded in Van Diemen's Land (modern-day Tasmania), followed by the opening of the interior to European settlement after the Blue Mountains crossing in 1813. The British claim over Australia was further solidified by the establishment of settlements such as King George Sound in 1827 and the Swan River Colony in 1829. The 19th century saw the rise of various colonies, with separate colonies founded for Tasmania, South Australia, Victoria, and Queensland. Western Australia remained a free colony until it briefly accepted convicts from 1850 to 1868.

The struggle against the convict system culminated in the abolition of transportation to the eastern colonies by the 1850s, and the expansion of free settlements continued. By the mid-19th century, Australia's colonial history had been firmly established, setting the stage for the country's future development and eventual federation.