During the Cretaceous, Australia separated from the rest of Gondwana. Seafloor spreading commenced on the northwestern margin and progressed anticlockwise around the continent throughout the Cretaceous. In the Bonaparte Basin, the formerly extensive alluvial and paralic areas contracted, as subsidence of the rifted margin gave rise to a marine transgression.

The seaward edge of the Canning Basin remained paralic, fed by a large river system. Local basaltic eruptions and uplift in the Perth and Carnarvon Basins, associated with a marine regression, were early signs of the impending breakup along that margin. The Barrow deltas started to build out into the Carnarvon Basin, supplied with sediment from uplifted land to the south. The sand deposited in these deltas has provided some of the best reservoirs for oil and gas accumulations on the North West Shelf.

As the rift between Australia and Antarctica grew, braided river deposition commenced in the Eucla Basin; these rivers flowed southward into the rift valley. Erosion of the rift valley flanks and local highs within the valley led to the accumulation of sediments in depressions further east in the Otway, Bass and Gippsland Basins.

The climate in this area is believed to have been sub-tropical to warm-temperate, in spite of the high latitude of the southern margin at that time. Most modern plant groups, except for flowering plants (angiosperms), were already represented.

A network of river channels, shallow lakes and swamps dominated the basins of eastern Australia. Only in the far north did the marginal environments give any indication of a nearby sea. Lake Murta, in the central Eromanga Basin, was a focus for internal drainage; organic matter, which became the source for many oil accumulations, was laid down in this lake. Volcanic eruptions in the Maryborough Basin led to the deposition of blankets of ash in that region.