Large fires coincident with drought occurred in south-eastern Australia during 2001–2007. Perceptions of large, intense fires as being ecologically ‘disastrous’ are common. These are summarised by four hypotheses characterising large fires as: (i) homogenous in extent and intensity; (ii) causing large-scale extinction due to perceived lack of survival and regeneration capacity among biota; (iii) degrading due to erosion and related edaphic effects; (iv) unnatural, as a consequence of contemporary land management. These hypotheses are examined using available evidence and shown to inadequately account for effects of large fires on biodiversity. Large fires do not burn homogeneously, though they may produce intensely burnt patches and areas. The bulk of biota are resilient through a variety of in situ persistence mechanisms that are reinforced by landscape factors. Severe erosive episodes following fire tend to be local and uncertain rather than global and inevitable. Redistribution of soil and nutrients may reinforce habitat variation in some cases. Signals of fire are highly variable over prehistoric and historic eras, and, in some cases, contemporary and pre-European signal levels are equivalent. The most important effects of large fires in these diverse ecological communities and landscapes stem from their recurrence rate. Adaptive management of fire regimes rather than fire events is required, based on an understanding of risks posed by particular regimes to biota.