The Cainozoic basalt chronology of the SE Highlands of Australia correlates with depositional cycles in the flanking basins, in particular the Murray and Gippsland Basins, and gives rise to the hypothesis that periods of more intense volcanism correspond with uplift of the Highlands and concomitant subsidence of the flanking basins. Conversely, periods of less intense volcanism correspond with settling of the Highlands and concomitant rising of the flanking basins. In terms of current extent, the SE Highlands came into existence between 60 and 50 Ma ago with the inception and rapid alluviation of the Murray Basin. Within the Cainozoic, the Highlands have undergone at least three episodes of uplift with concurrent basalt volcanism, linked with episodes of marine transgression followed by regression in the flanking basins.