The Permian (Sakmarian-Artinskian) Talaterang and Shoalhaven Groups form the basal part of the Sydney Basin succession at its southernmost onshore extremity. A new stratigraphic model is proposed for the southern Sydney Basin and, although the previous group division is retained, considerable rearrangement of formations within and between the groups has been necessary as a result of recent field work. The Talaterang Group now includes the Clyde Coal Measures (incorporating the previous Pigeon House Creek Siltstone) and the Wasp Head Formation. The lower units in the overlying Shoalhaven Group are the Yadboro and Tallong Conglomerates, Pebbley Beach Formation, Yarrunga Coal Measures and Snapper Point Formation. Within the Talaterang Group, north-directed sediment dispersal in the mud-rich alluvial Clyde Coal Measures sequence and high energy east-directed debris flows in the Wasp Head Formation suggest axial and transverse drainage related to possible north-trending extensional (rift) sub-basins similar to those in the Gunnedah and Bowen Basins. A succeeding phase of passive thermal subsidence initiated deposition of the Shoalhaven Group comprising a high energy alluvial braidplain succession (Yadboro and Tallong Conglomerate), a fluvial to transgressive marine sandstone succession (Snapper Point Formation) and laterally equivalent coastal and protected embayment deposits represented by the Yarrunga Coal Measures and Pebbley Beach Formation. An overall rise in relative sea-level during the deposition of the lower Shoalhaven Group led to the fluvial facies giving way both laterally and vertically to shallow marine (Snapper Point Formation) and then the deeper shelf facies of the Wandrawandian Siltstone. © 1996 Taylor & Francis Group, LLC.