The Millennium Drought lasted more than a decade and is notable for causing persistent shifts in the relationship between rainfall and runoff in many southeastern Australian catchments. Research to date has successfully characterised where and when shifts occurred and explored relationships with potential drivers, but a convincing physical explanation for observed changes in catchment behaviour is still lacking. Originating from a large multi-disciplinary workshop, this paper presents and evaluates a range of hypothesised process explanations of flow response to the Millennium Drought. The hypotheses consider climatic forcing, vegetation, soil moisture dynamics, groundwater, and anthropogenic influence. The hypotheses are assessed against evidence both temporally (e.g. why was the Millennium Drought different to previous droughts?) and spatially (e.g. why did rainfall–runoff relationships shift in some catchments but not in others?). Thus, the strength of this work is a large-scale assessment of hydrologic changes and potential drivers. Of 24 hypotheses, 3 are considered plausible, 10 are considered inconsistent with evidence, and 11 are in a category in between, whereby they are plausible yet with reservations (e.g. applicable in some catchments but not others). The results point to the unprecedented length of the drought as the primary climatic driver, paired with interrelated groundwater processes, including declines in groundwater storage, altered recharge associated with vadose zone expansion, and reduced connection between subsurface and surface water processes. Other causes include increased evaporative demand and harvesting of runoff by small private dams. Finally, we discuss the need for long-term field monitoring, particularly targeting internal catchment processes and subsurface dynamics. We recommend continued investment in the understanding of hydrological shifts, particularly given their relevance to water planning under climate variability and change.