Elucidating the material culture of early people in arid Australia and the nature of their environmental interactions is essential for understanding the adaptability of populations and the potential causes of megafaunal extinctions 50-40 thousand years ago (ka). Humans colonized the continent by 50 ka, but an apparent lack of cultural innovations compared to people in Europe and Africa has been deemed a barrier to early settlement in the extensive arid zone. Here we present evidence from Warratyi rock shelter in the southern interior that shows that humans occupied arid Australia by around 49 ka, 10 thousand years (kyr) earlier than previously reported. The site preserves the only reliably dated, stratified evidence of extinct Australian megafauna, including the giant marsupial Diprotodon optatum, alongside artefacts more than 46 kyr old. We also report on the earliest-known use of ochre in Australia and Southeast Asia (at or before 49-46 ka), gypsum pigment (40-33 ka), bone tools (40-38 ka), hafted tools (38-35 ka), and backed artefacts (30-24 ka), each up to 10 kyr older than any other known occurrence. Thus, our evidence shows that people not only settled in the arid interior within a few millennia of entering the continent, but also developed key technologies much earlier than previously recorded for Australia and Southeast Asia.