In arid environments dominated by desert dunes, aeolian sediments represent a major source of potential palaeoenvironmental information. However, the extent to which dune sedimentology can be used for past environmental reconstruction is unclear. This paper assesses the value of dune sediments as palaeoenvironmental indicators by investigating the sedimentological characteristics of linear dunes in the Strzelecki and Tirari Deserts of central Australia. We use thin section microscopy, particle size analysis and X-ray Diffractometry (XRD) mineralogy to characterise the sediments occurring within the dunefields of the region, and examine the stratigraphic record in the context of dune preservation and sediment reworking. We find that it is rarely possible to reconstruct past environmental change within desert dunefields purely on the basis of sedimentological evidence. However, limited palaeoenvironmental information is preserved within dune sediments which can be combined with additional arid zone proxies and geochronological techniques to enable the most reliable reconstruction of past conditions. Paleosols provide the most informative and unambiguous palaeoenvironmental indicators within dune sediments, acting as markers of relative environmental stability. Paleosols are characterised by pedogenic carbonates and gypsum, and illuviated clays in the form of intact grain coatings. The potential for incomplete stratigraphic preservation within dunes is a critical consideration for reconstructing palaeoenvironments, however the preservation of paleosols indicates that the dunes in this region have not been completely reworked. Grain coatings provide important evidence both for pedogenesis when they are intact, and for aeolian reworking when they are partially abraded. Abraded cutans are ubiquitous across the region studied. Linear dune mineralogy of the Strzelecki and Tirari Deserts is dominated by quartz, with minor feldspar and clay minerals, the latter in the form of grain coatings and aggregates. The occurrence of intact sand-sized aggregates composed of clay and silt particles at several sites indicates incipient rather than peak aridity, and may, within this geomorphic context, indicate reduced stream discharges. Grain size shows a regional bias, although silt-sized material is most likely to have been deposited as long-travelled dust. The regional grain size characteristics, combined with local occurrences of rock fragments and high feldspar content, suggest that sediments are mostly derived from local sources.