BACKGROUND: Cost-utility analyses (CUAs) are increasingly common in Australia. The EuroQol five-dimensional (EQ-5D) questionnaire is one of the most widely used generic preference-based instruments for measuring health-related quality of life for the estimation of quality-adjusted life years within a CUA. There is evidence that valuations of health states vary across countries, but Australian weights have not previously been developed. METHODS: Conventionally, weights are derived by applying the time trade-off elicitation method to a subset of the EQ-5D health states. Using a larger set of directly valued health states than in previous studies, time trade-off valuations were collected from a representative sample of the Australian general population (n = 417). A range of models were estimated and compared as a basis for generating an Australian algorithm. RESULTS: The Australia-specific EQ-5D values generated were similar to those previously produced for a range of other countries, but the number of directly valued states allowed inclusion of more interaction effects, which increased the divergence between Australia's algorithm and other algorithms in the literature. CONCLUSION: This new algorithm will enable the Australian community values to be reflected in future economic evaluations