The geographical position of the island of New Guinea suggests that it may have been an early staging post in the Pleistocene settlement of Australia from the Indonesia-Indochina region. Previous data have not supported this, as archaeological sites 35,000 to 40,000 years old occur in southern Australia, whereas the earliest previously known in Papua New Guinea is 26,000 years old. We now report evidence that the north coast of Papua New Guinea was occupied at least 40,000 years ago. Sahuland, which is the greater land area of Australia and New Guinea plus their connecting continental shelf exposed as land when Pleistocene sea levels were lower than now, was occupied by humans in several widely separated areas at that time. A distinctive 'waisted axe' culture appears to have existed in New Guinea and probably in Australia in the Late Pleistocene, but antecedents are not yet known from east and southeast Asia. There is evidence for hafting of these tools at a date which is earlier than known elsewhere in the world.