Lithostratigraphy of the Holocene Lake Illawarra barrier estuary on the New South Wales coast, Australia, adds details to previous models of barrier estuary evolution. Establishment of a detailed chronology, with the use of 121 aspartic acid–derived ages and six radiocarbon ages, has allowed the definition of a five-stage geomorphic model for the infill of the barrier estuary. A broad incised valley formed during the sea level lowstand represents the initial stage. Stage two is represented by a basal transgressive marine sand sheet deposited in response to rising sea levels associated with the last postglacial marine transgression, which inundated the shallow incised valley ca. 8000–7500 years ago. This feature is not present in the deeper and narrower incised valleys used to establish previous barrier estuary models. The more open marine conditions, with a diverse assemblage of estuarine and marine mollusc species, persisted until ca. 5000 years ago when the barrier started to become emergent and resulted in the development of a low-energy back-barrier lagoonal environment (stage 3). A late Holocene regression (1–2 m) of sea level between 3200–2500 years ago (stage 4) further restricted oceanic circulation and increased the rate of fluvial bay-head delta progradation. The final stage has seen a rapid extension of the fluvial deltas and increased rates of lagoonal sedimentation during the past 200 years as a result of land clearing for agriculture and urban and industrial development. This five-stage evolutionary model of barrier estuary evolution developed for Lake Illawarra can be applied to other shallow estuaries on tectonically stable, wave-dominated coastlines.