Droughts are initiated and significantly maintained by precipitation deficits. This study demonstrates that meteorological droughts in Australia are strongly related to changes in the occurrence of heavy rainfall events. We use the standardised precipitation index to identify periods of drought onset, drought development, and recovery from drought. This method successfully identifies the major multi-year drought periods in Australia, which have major impacts on a range of sectors. We show that the occurrence of meteorological (i.e. precipitation-deficit) drought in Australia is regulated by changes in days of significant rainfall. Days with rainfall above 20 mm are responsible for a median of approximately 60% of the reduction in rainfall during drought development periods, and approximately 70% of the rainfall surplus during drought recovery periods. These changes in days of higher rainfall accumulation, which are the greatest contributors to the total reduction in rainfall during drought, equate to very few days per year of rainfall: less than 10 days/year equivalent for the majority of the continent. It is a reduction in these heavy, but infrequent rainfall days that results in a location being classified as in meteorological drought. Similarly, an above-average occurrence of such days will indicate a period of at least partial recovery from drought. Both the frequency of heavy rainfall days and their contribution to accumulated rainfall are demonstrated to be important. These results indicate that an investigation of the synoptic weather systems responsible for heavy rainfall days, as well as changes in the frequency of occurrence of these systems and their relative contributions to total rainfall, is necessary to advance the understanding of drought in Australia.