19 February – Darwin is bombed by Japanese forces for the first time. At least 243 persons are killed.
1 March – The cruiser HMAS Perth is torpedoed by Japanese destroyers in the Battle of Sunda Strait, sinking with the loss of 350 crew and three civilians.
3 March – 88 Allied civilians and military personnel were killed and 22 aircraft were lost when Japanese Zero fightersstrafed Broome.
20 March – At Terowie, South Australia, American General Douglas MacArthur makes his famous speech which included the words "I came out of Bataan and I shall return."
7 June – The Income Tax (War-time Arrangements) Act 1942 is enacted, transferring the power to levy personal income tax from the states to the federal government.
9 October - Australia adopts sections 2 to 6 of the Statute of Westminster 1931 effectively ending British dominion
30 October – Construction begins on the Burma Railway, begun by 15,000 Australian prisoners-of-war captured by the Japanese after the fall of Singapore.
16 November - Japan retreats from Kokoda Trail with Australia being the Victor
26 November – A violent brawl breaks out in Brisbane between United States military personnel and Australian servicemen and civilians, in what becomes known as the "Battle of Brisbane". One Australian soldier is shot dead.
