We review the environmental challenges, cultures and institutions in Australia that have allowed the concept of ecosystem services to be tested and adapted. In some instance the nation has embraced the opportunities offered with ecosystem services forming the core of several large-scale reforms and collaborations that have considered dependence of humans on ecosystems. In other ways, however, the opportunities have been overlooked as Australia lacks effective institutions to consider human-environment interactions holistically and strategically. The term "ecosystem services" appears widely but it is mostly used superficially: often with reference to only a few services. The full suite of services, benefits and beneficiaries if humans and the natural environment are to coexist in the long-term have not been systematically included in decision making and management. Insights are distilled that may be useful in the application of ecosystem services in other parts of the world. Stable and well-funded regional natural resource and river basin management institutions have vital roles. Governance reforms at the national and state (provincial scales) are also needed to apply ecosystem service frameworks and improve accountability for implementation of policy agreements.