Understanding long-term ecological development of wetlands is critical to effective management. The islands of Bass Strait, southeast Australia, have several biologically diverse natural wetlands, including Ramsar sites, yet little is known about their ecology. Here, through a multi-proxy palaeoecological approach, we seek to understand how wetland floristic composition and hydrology has changed on truwana/Cape Barren Island (CBI), and how changes in fire regimes have affected wetland integrity and ecological dynamics. We use wetland fossil pollen, non-pollen palynomorphs and sediment geochemistry to reconstruct wetland development and compare it to existing records of terrestrial vegetation and fire regimes from the island. Our results suggest periods of moderately salineâ€“brackish conditions and moderate fire activity supported high floristic richness in wetlands, while floristic richness reduced during periods of extremely high or low salinity or high fire activity. Past changes in precipitation regimes primarily drove water-level changes in wetlands; however, changes in wetland and surrounding terrestrial vegetation cover also contributed to wetland water level dynamics. We recommend long-term monitoring of wetland salinity and water-level changes to track potential changes in wetland floristic richness on truwana/CBI. Controlled fires could also be used to manage wetland biodiversity after careful consideration and experimentation to determine appropriate fire levels that maximize wetland floristic richness and biocultural values.