Explanations for the Upper Pleistocene extinction of megafauna from Sahul (Australia and New Guinea) remain unresolved. Extinction hypotheses have advanced climate or human-driven scenarios, in spite of over three quarters of Sahul lacking reliable biogeographic or chronologic data. Here we present new megafauna from north-eastern Australia that suffered extinction sometime after 40,100 (±1700) years ago. Megafauna fossils preserved alongside leaves, seeds, pollen and insects, indicate a sclerophyllous forest with heathy understorey that was home to aquatic and terrestrial carnivorous reptiles and megaherbivores, including the world’s largest kangaroo. Megafauna species diversity is greater compared to southern sites of similar age, which is contrary to expectations if extinctions followed proposed migration routes for people across Sahul. Our results do not support rapid or synchronous human-mediated continental-wide extinction, or the proposed timing of peak extinction events. Instead, megafauna extinctions coincide with regionally staggered spatio-temporal deterioration in hydroclimate coupled with sustained environmental change.