Apart from an exchange deployment to the Mediterranean from 1934 to 1936, during which she became involved in the planned British response to the Abyssinia Crisis, Australia operated in local and South-West Pacific waters until World War II began.

During the late 1940s, Australia served with the British Commonwealth Occupation Force in Japan, and participated in several port visits to other nations, before being retasked as a training ship in 1950.

[1] The cruiser was initially fitted with short exhaust funnels, but during sea trials of Australia and other Kent-class ships, it was found that smoke from the boilers was affecting the bridge and aft control position.

[1] On 10 December 1934, Australia was sent to the United Kingdom on exchange duty, with the Duke of Gloucester, who had visited Victoria for the state's centenary of foundation the month previous, aboard.

[14] Australia's initial role in any British assault on the Italian Navy was to cover the withdrawal of the aircraft carrier HMS Glorious after an air attack on the base at Taranto.

[11] She underwent a modernisation refit at Cockatoo Island Dockyard, during which her single 4-inch guns were replaced with twin mountings, belt armour measuring up to 4.5 inches (110 mm) thick was fitted over the machinery spaces, and handling arrangements for the ship's aircraft and boats were improved.

[22] Attempts to disable the battleship were made by boat and air during 7 and 8 July; on the second day, Australia fired in anger for the first time when a French aircraft flew near the Allied ships and dropped bombs with no effect.

[24] At the start of September, Australia was assigned to Operation Menace (the Allied effort to install the Free French in Vichy-controlled Dakar) as a replacement for the torpedoed British cruiser Fiji.

[21] On 24 September, despite poor visibility, Australia joined other Allied ships in shelling Dakar and the French warships in the harbour; during the withdrawal to the rest of the fleet, the Australian cruiser was unsuccessfully attacked by high-altitude bombers.

[21] On 29 October, Australia recovered nine of the thirteen crew from a Short Sunderland flying boat which crashed off Greenock, Scotland during a gale; the other four were carried away by the heavy seas during the rescue.

[33] During November, the cruiser sailed to the Kerguelen Islands during searches for German commerce raiders, and after finding evidence of enemy activity, deployed magnetic sea mines in case they returned.

[35][36] Prompted by the loss of HMAS Sydney and the deteriorating situation in South-east Asia, Australia was ordered on 3 December to hand Convoy WS12X to HMS Dorsetshire, then make for home.

[41] The stokers were found guilty of the first ever murder aboard an Australian warship; under British naval regulations (which the RAN was operating under), the men were to be hanged from the cruiser's yardarm.

[43] Prompted by the murder, along with issues relating to the legal control of shipping in Australian ports, and the National Security Act, a bill ratifying the Statute was passed on 9 October and backdated to the start of the war.

[48] The ships reached their patrol area around 14:00, fired on a group of eleven unidentified aircraft at maximum range with no damage dealt at 14:27, and were attacked themselves by twelve Japanese twin-engine torpedo bombers at 15:06.

[50] Although USN Vice Admiral Herbert F. Leary made plans to train aircrews in naval vessel recognition in response, USAAF General George Brett refused to implement them or acknowledge that the friendly fire incident had happened.

[50] With no new orders, Crace decided to relocate his ships during the night to a point 220 nautical miles (410 km; 250 mi) from Port Moresby, to better intercept a Japanese invasion force if it came through either the Jomard Passage or the China Strait.

[55] The various elements began to head for their positions on 6 August, with Australia leading Squadron X (with four other cruisers, nine destroyers, nine transports, and six store ships) towards the main landing site, on the north side of Guadalcanal.

[57] While moving into position, Australia and the other warships fired on shore targets sporadically, then commenced a coordinated bombardment before the first wave of landing craft hit the beach unopposed just after 08:00.

[66] After arrival on 21 August, Crutchley and Australia were placed in command of the carriers' combined surface defence group, including several cruisers and the battleship USS North Carolina.

[69] Four days later, Australia sailed with the task force for Milne Bay, where Allied ships and shore positions had been attacked several times by Japanese warships.

[75] Six days later, Task Force 74 was sent to Espiritu Santo to reinforce the United States Third Fleet, which had lost four cruisers to torpedoes (one sunk, three withdrawn for major repairs) while supporting the New Georgia Campaign.

[79] The ships then sailed for Milne Bay, where they remained until they were ordered to Port Purvis on Florida Island, in the Solomons, on 11 November to serve as support for the Third Fleet following the start of the Bougainville invasion.

[85] On the morning of 7 February, Crutchley transferred his flag to HMAS Shropshire; the role of Flagship was returned to Australia on 21 March, three days after she rejoined Task Force 74 at Milne Bay.

[104] On 12 June, the combined task force returned to Seeadler Harbour, and Crutchley left Australia, having completed his two-year assignment as Rear Admiral Commanding Australian Squadron.

[111] The cruiser remained on station to provide fire support until the evening of 16 September, when Australia and the other ships normally assigned to Task Force 74 were permitted to withdraw to Mios Woendi.

[45][119][120] Observers aboard Australia and nearby Allied ships differed in their opinions of the collision; some thought that it was an accident, while the majority considered it to be a deliberate ramming aimed at the bridge.

[135][137] Two days later, she docked at Cockatoo Island for repair and the preliminary stages of the refit, including the removal of 'X' turret and the aircraft catapult, and the shortening of the funnels by 5 feet (1.5 m) each.

[140] Better-than-expected weather on the outbound voyage was countered by poor conditions at Heard Island, with Australia forced to loiter for a day before a boat could be safely launched to collect the doctor.

[11] During February and March 1954, the cruiser served as part of the escort for the Royal Yacht Gothic, during the Australian leg of Queen Elizabeth II's coronation world tour.