By this time, the storm had been tracking towards the southwest and struck the Sir Edward Pellew Group of Islands later on 22 March before moving over the Australian mainland as a slightly weaker system.

Once over land, Kathy rapidly degraded, losing gale-force winds within 24 hours; the storm dissipated over the Northern Territory on 24 March.

Moving through the Pellew Islands as a powerful cyclone, Kathy generated a maximum storm surge of 4.2 m (14 ft) and winds exceeding 232 km/h (144 mph).

Attaining a pressure of 990 hPa (mbar; 29.23 inHg), the weak system made landfall just north of Weipa, Queensland on 19 March before losing strength.

[4] At this time, the storm was estimated to have a Dvorak technique rating of 7.0, equivalent to a Category 5 on the Saffir–Simpson hurricane scale;[5] As Cyclone Kathy neared the Australia coastline later on 22 March, it began to weaken as it interacted with land.

[5] Roughly 5 hours after peaking, the storm passed directly over the Sir Edward Pellew Group of Islands, resulting in a degrading structure.

[5][7] In the hours after landfall, Kathy rapid weakened, no longer retaining gale-force winds once 200 km (120 mi) away from the Gulf on 23 March.

No measurements from the centre of the storm were made, although a wind gust of 60 km/h (37 mph) was recorded in Batavia Downs, Queensland, about 55 km (34 mi) south-southeast of the cyclone.

[2] Striking the Sir Edward Pellew Group of Islands as a high-end Category 4 cyclone, Kathy wrought significant damage in the region.

[9] Along the mouth of the McArthur River, near where Kathy struck the mainland, the combination of severe winds and storm surge killed 80% (±20%) of the Rhizophoraceae mangrove trees in the region.

By 25 March, a Royal Australian Air Force aircraft was sent to the region carrying emergency supplies for sheltering displaced persons.