The Nelson Bay Local Fauna, recovered from a paleosol horizon exposed in the sea cliffs at Nelson Bay, Portland, Victoria, Australia, comprises over 30 different mammalian species making it one of the most diverse early Pleistocene faunas in Australia. Its age is well constrained to 1.77–0.78 Ma by radiometric, biostratigraphic and paleomagnetic dating methods. The composition of the fauna, which includes predominantly browsing-grade taxa and a number of arboreal species, suggests the paleoenvironment was a mosaic of open forest and woodland. This habitat acted as a refuge for forest-adapted taxa previously known only from the early Pliocene, such as the ektopodontid, Darcius duggani, the giant ring-tailed possum, Pseudokoala, a small palorchestid, Palorchestes pickeringi, and a new species of Protemnodon. The Nelson Bay Local Fauna was compared at the generic level with six other faunas ranging in age from early Pliocene to Recent using Simpson's coefficient of faunal resemblance. This analysis shows the Nelson Bay Local Fauna, with its combination of extant, typical Pleistocene megafauna, and ‘relict’ Pliocene species, to be unusual in the region. The combination of taxa in the Nelson Bay Local Fauna may be characteristic of early Pleistocene terrestrial mammal assemblages of southeastern Australia, and could be used cautiously to date other faunas, e.g., Childers Cove Local Fauna.