Small mounds of peat rise several metres above the level of the water-table at Melaleuca Inlet and Louisa Plains on the buttongrass plains in southwest Tasmania. Possible origins of the peat mounds have been explored by pollen analysis and radiocarbon dating of a set of samples taken from a vertical section of one peat mound at Melaleuca. The peat accumulation is entirely of Holocene age although the mound is underlain by sapric peats preserving a cold climate palynoflora of probable Late Pleistocene age. Peats at and near the base of the mound accumulated under a heath sedgeland during the earliest Holocene while after about 7630 a BP the peat-forming vegetation was shrub-dominated. The radiocarbon data indicate two main phases of overall peat accumulation, between 7630 and 5340 a BP (Middle Holocene) and between 4450 and 450 a BP (Late Holocene), that were interrupted by a wildfire which burnt into the surface peats. The maintenance of high surface and internal levels of moisture almost certainly was the critical factor behind the low incidence of in situ fires burning into the surface peats on the mound. The perennial influx of groundwater below the mound is a possible origin that fits well with our observations, although the expansion and contraction of soils cannot be discounted as an initiating factor. Enhanced nutrient input from birds may have helped promote growth in the peat-forming communities. The data do not support the mounds being eroded remnants of a former blanket peat cover or being due to periglacial activity. The peat mounds of southwest Tasmania deserve maximum protection because of their rarity in the Australian landscape and, it seems, elsewhere.