In temperate Australia, wildfires are predicted to be more frequent and severe under climate change. This could lead to marked changes in tree mortality and regeneration in the region’s predominant eucalypt forests, which have been burned repeatedly by extensive wildfires in the period 2003–14. Recent studies have applied alternative stable state models to select ‘fire sensitive’ forest types, but comparable models have not been rigorously examined in relation to the more extensive ‘fire tolerant’ forests in the region. We review the effects of increasing wildfire frequency on tree mortality and regeneration in temperate forests of Victoria, south-eastern Australia, based on the functional traits of the dominant eucalypts: those that are typically killed by wildfire to regenerate from seed (‘obligate seeders’) and those that mostly survive to resprout (‘resprouters’). In Victoria, over 4.3 million ha of eucalypt forest has been burned by wildfire in the last decade (2003–14), roughly equivalent to the cumulative area burned in the previous 50 years (1952–2002; 4.4 million ha). This increased wildfire activity has occurred regardless of several advancements in fire management, and has resulted in over 350 000 ha of eucalypt forest being burned twice or more by wildfire at short (≤11 year) intervals. Historical and recent evidence indicates that recurrent wildfires threaten the persistence of the ‘fire sensitive’ obligate seeder eucalypt forests, which can facilitate a shift to non-forest states if successive fires occur within the trees’ primary juvenile period (1–20 years). Our review also highlights potential for structural and state changes in the ‘fire tolerant’ resprouter forests, particularly if recurrent severe wildfires kill seedlings and increase tree mortality. We present conceptual models of state changes in temperate eucalypt forests with increasing wildfire frequency, and highlight knowledge gaps relating to the development and persistence of alternative states driven by changes in fire regimes.