Author Posting. © American Meteorological Society, 2016. This article is posted here by permission of American Meteorological Society for personal use, not for redistribution. The definitive version was published in Journal of Climate 29 (2016): 6201-6221, doi:10.1175/JCLI-D-15-0694.1. ; Anomalous conditions in the tropical oceans, such as those related to El Niño–Southern Oscillation and the Indian Ocean dipole, have been previously blamed for extended droughts and wet periods in Australia. Yet the extent to which Australian wet and dry spells can be driven by internal atmospheric variability remains unclear. Natural variability experiments are examined to determine whether prolonged extreme wet and dry periods can arise from internal atmospheric and land variability alone. Results reveal that this is indeed the case; however, these dry and wet events are found to be less severe than in simulations incorporating coupled oceanic variability. Overall, ocean feedback processes increase the magnitude of Australian rainfall variability by about 30% and give rise to more spatially coherent rainfall impacts. Over mainland Australia, ocean interactions lead to more frequent extreme events, particularly during the rainy season. Over Tasmania, in contrast, ocean–atmosphere coupling increases mean rainfall throughout the year. While ocean variability makes Australian rainfall anomalies more severe, droughts and wet spells of duration longer than three years are equally likely to occur in both atmospheric- and ocean-driven simulations. Moreover, they are essentially indistinguishable from what one expects from a Gaussian white noise distribution. Internal atmosphere–land-driven megadroughts and megapluvials that last as long as ocean-driven events are also identified in the simulations. This suggests that oceanic variability may be less important than previously assumed for the long-term persistence of Australian rainfall anomalies. This poses a challenge to accurate prediction of long-term dry and wet spells for Australia. ; This study was supported by the Australian Research Council (ARC) under ARC-DP1094784, ARC-DP-150101331, ARC-FL100100214, and funding for C.C.U. from the National Science Foundation under AGS-1602455 and the ARC Centre of Excellence for Climate System Science. ; 2017-02-19