Wales survived a late Australian barrage to claim a 21-18 win in Cardiff.
Wales started the better of the two sides scoring the first try in just the fourth minute.
Stirling Mortlock departed with barely two minutes on the board when he collided with Jamie Roberts and just two minutes later newly crowned IRB Player of the Year Shane Williams started and finished a well constructed move by freeing Lee Byrne and Jamie Roberts before popping up on the wing to score.
A sloppy lineout from the Welsh let Australia back in the game when Mark Chisholm pounced on the loose ball and ran all of 70 metres for a great solo try. When Matt Giteau added the extras the Wallabies had the lead.
Wales were dominant at the breakdown, but despite all their possession, it was Australia who extended their lead through a brilliant Giteau drop-goal.
The Dragons came back in style, first through a Stephen Jones penalty and then through a try from fullback Byrne. Jones slotted the conversion and Wales had a five-point lead which they held until the break.
Jones missed two easy penalties at the start of the half and Giteau later cut the lead to just two points with a 46th minute penalty.
Wales were under immense pressure, but were able to repel wave after wave of Australian attack, and Jones made amends for his earlier misses with a cheeky 67th minute drop-goal.
Another Jones penalty with time running out looked to have secured the result, but Australia threw everything they had at the Dragons.
The Wallabies finally managed to break the Welsh defence when winger Digby Ioane crossed for a late try, but Giteau missed the conversion.
Wales - Tries: Shane Williams, Lee Bryne. Conversions: Stephen Jones. Penalties: Jones (2). Drop goal: Jones.
Australia – Tries: Mark Chisholm, Digby Ioane. Conversions: Matt Giteau. Penalties: Giteau. Drop goal: Giteau.