A sudden reduction in rainfall occurred in the southwest of Western Australia in the mid-20th century. This reduced inflows to the Perth water supply by about 120 GL (42%) and led to an acceleration of projects to develop new water sources at a cost of about $300 million. The reduction in rainfall was coincident with warmer temperatures. A major analysis of these changes indicated that the changes in temperature were likely caused by the enhanced greenhouse effect and that the changes in rainfall were likely caused by a large-scale reorganization of the atmospheric circulation. We explore an alternative hypothesis that large-scale land cover change explains the observed changes in rainfall and temperature. We use three high-resolution mesoscale model configurations forced at the boundaries to simulate (for each model) five July climates for each of natural and current land cover. We find that land cover change explains up to 50% of the observed warming. Following land cover change, we also find, in every simulation, a reduction in rainfall over southwest Western Australia and an increase in rainfall inland that matches the observations well. We show that the reduced surface roughness following land cover change largely explains the simulated changes in rainfall by increasing moisture divergence over southwest Western Australia and increasing moisture convergence inland. Increased horizontal wind magnitudes and suppressed vertical velocities over southwest Western Australia reduce the likelihood of precipitation. Inland, moisture convergence and increased vertical velocities lead to an increase in rainfall. Our results indicate that rainfall over southwest Western Australia may be returned to the long-term average through large-scale reforestation, a policy option within the control of local government. Such a program would also provide a century-scale carbon sink to ameliorate Australia's very high per capita greenhouse gas emissions.