At the start of the year they overcame the loss of leg-spinner Shane Warne to win the World Cup in convincing fashion.
Yet come December, India's breathtaking victory in the second Test at Adelaide left some wondering if the era of Australian dominance was coming to an end.
Even without Warne, banned for a year for failing a drugs test, which he said was the result of a slimming pill given to him by his mother, the reigning champions made it into the World Cup final in Johannesburg where they overwhelmed India.
They won by 125 runs with captain Ricky Ponting's World Cup final record 140 not out guiding Australia to a tournament record 359 for two.
Australia had gone to the World Cup without Test skipper Steve Waugh, who subsequently announced that the current series with India would be his last as an international cricketer.
By force of will Waugh turned himself from a dashing, if inconsistent, stroke player into a run-getter of relentless resolve, routinely chosen by peers and fans alike as the man they would have bat for their life.
Waugh, who will finish his career as cricket's most capped Test cricketer, made his mark as a captain too.
The speed with which his Australia teams scored their runs redefined the nature of Test cricket, almost making the draw obsolete.
Indeed such was the frequency with which Waugh was able to enforce the follow-on, Brett Lee's agent said it was a contributory factor to his client's injury problems because the fast bowler was not getting sufficient rest between innings.
Rest was not an issue for Matthew Hayden who in October made a Test world-record 380 against Zimbabwe at Perth, an innings that highlighted the Africans' shortcomings as much as it showcased the batsman's virtues.
It was another tough year for Zimbabwe. The black-armband World Cup protest by senior batsman Andy Flower and fast bowler Henry Olonga deprived them of two of their best players while the team lost 11 Tests in a row.
But at least that was not as bad as Bangladesh, Test cricket's newest entrants taking their losing streak to 20 matches.
At the World Cup they failed to win a match, even being beaten by Canada (for whom John Davison later scored the fastest-ever World Cup hundred, against the West Indies).
And during the tournament Bangladesh were also on the receiving end of an unprecedented hat-trick with the first three balls of a One-day International as Sri Lanka left-arm quick Chaminda Vaas carved his name into the record books.
Elsewhere, hosts South Africa bounced back from the shock of their first round World Cup exit by making 22-year-old batsman Graeme Smith their youngest-ever captain.
Any thoughts that leadership might impair his batting were dispelled when the left-handed opener began the Test series in England with successive double hundreds.
During that drawn series England saw Nasser Hussain resign the captaincy with Michael Vaughan taking over. Fast bowler Darren Gough retired from Test cricket while 40-year-old wicket-keeper batsman Alec Stewart, England's most-capped player, bowed out from all international cricket.
Theirs were not the only high-profile retirements. South Africa lost paceman Allan Donald, Pakistan fast bowler Wasim Akram - the only man to take more than 400 Test and One-day wickets - while Sri Lanka said goodbye to batsman Aravinda de Silva.
Elsewhere India fast bowler Javagal Srinath retired again after being asked back for the World Cup.
Meanwhile gifted West Indies batsman Carl Hooper began the second self-imposed exile of his international career after being sacked as captain following the World Cup.
But without him the West Indies scored a world record fourth innings 418 for seven in the fourth and final Test against Australia in Antigua in May.
Australia's blistering pace with the bat meant they often left themselves open to the possibility of a dramatic counter-attack.
Waugh's bowlers usually snuffed out that possibility. But against an attack lacking injured quicks Glenn McGrath and Lee, as well as the suspended Warne, India achieved one of the most remarkable comeback Test wins of all-time earlier this month.
After conceding a mammoth 556 in Australia's first innings, India slumped to 85 for four before Rahul Dravid, with a monumental 233, and VVS Laxman (148) put on 303 for the fifth wicket to bring India near-parity.
Australia then collapsed to 196 all out in the second innings, medium-pacer Ajit Agarkar the unlikely hero with six for 41.
But it still needed a gritty 72 not out from the ever-patient Dravid to steer India to their first win on Australian soil in nearly 23 years.
Australia under Waugh hardly ever lost Test matches when a series was still 'live'. When they did it was usually because a member of the opposition had the game of their life.
The challenge now for India and the rest of the world was to inflict upon Australia the kind of routine defeats Waugh's men handed out to everyone else. Then an era really would be over.