Terrestrial sedimentary archives that record environmental responses to climate over the last glacial cycle are underrepresented in subtropical Australia. Limited spatial and temporal palaeoenvironmental record coverage across large parts of eastern Australia contribute to uncertainty regarding the relationship between long-term climate change and palaeoecological turnover; including the extinction of Australian megafauna during the late Pleistocene. This study presents a new, high-resolution, calibrated geochemical record and numerical dating framework from Welsby Lagoon, a wetland from North Stradbroke Island that records key periods of late Pleistocene environmental change. Single-grain optically stimulated luminescence and radiocarbon dating are integrated into a Bayesian age-depth model for the sedimentary sequence spanning Marine Isotope Stage (MIS) 5 to the present. Scanning micro X-ray fluorescence (XRF) and bulk sediment XRF assays are used to infer past dust dynamics, with changes in the abundance of silica and potassium interpreted as proxies for aridity across local and regional sources. Variations in dust flux were contemporaneous with hydrological change, concordant with changes in vegetation cover on the island and, relate to deflation events at major dust source regions on the Australian continent. The Welsby Lagoon record supports the notion of a variable MIS4 within which an increased dust flux (71–67 ka), may be indicative of drier climate. Additionally, the record also shows a lower dust flux through the Last Glacial Maximum (LGM) than is evident in other Australian aeolian records. However, this low LGM flux is attributed to the wetland’s evolution, rather than a reduction in total dust flux.