This paper reviews the rationale, context and support for water fluoridation in Australia, and examines current Australian evidence concerning the caries-preventive effects of fluoridation and trends in dental fluorosis. Nearly two thirds of the Australian population resides in an area with adjusted levels of fluoride in the water supply. However, public knowledge about fluoridation is poor and opinion polls demonstrate declining support for fluoridation. In the press and scientific literature there has been questioning of fluoridation, although the most recent Australian review reasserted its safety and effectiveness. Results from Australian oral epidemiological studies consistently support the accumulated evidence on the effectiveness of water fluoridation. This includes recent evidence that lifetime exposure to fluoridation is associated with average reductions of 2.0 dmfs and between 0.12 and 0.30 DMFS per child compared with non-exposed children. Water fluoridation has been found to reduce socio-economic inequalities in caries, reducing the differential between high and low socio-economic status groups by approximately 1.0 dmfs and 0.2 DMFS per child. The prevalence of dental fluorosis may have increased, prompting renewed consideration of overall exposure to fluorides. Action is currently being taken to reduce the exposure to discretionary fluoride among pre-school children as part of a targeted approach to adjusting the benefit-risk relationship of exposure to fluorides for that age group. Community water fluoridation continues to be the most effective and socially equitable measure for caries prevention among all ages by achieving community-wide exposure to the caries preventive effects of fluoride.