Sam Kerr, who plays for nearby Chelsea in the English Super League, gave the injury-hit Matildas a first-half lead and Charlotte Grant added the second after the break.
For European champions England, who beat Brazil on penalties to win the inaugural women’s Finalissima at Wembley last week, it was the last warm-up game before the World Cup in New Zealand and Australia.
The Lionesses begin their campaign against Haiti in Brisbane on July 22.
Kerr, who was rested for Australia’s loss to Scotland on Friday, pounced on a weak back header by Leah Williamson to lob England goalkeeper Mary Earps after 32 minutes.
Kerr turned provider in the 67th minute sending in a cross that Grant headed in off the unlucky Williamson for a first international goal.
“It doesn’t feel great. A big learning game against a very physical and well-organised Australian side,” said Sarina Wiegman, after her first defeat as England coach.
“We made some mistakes,” she added.
In Le Mans in France, the hosts beat Olympic champions Canada 2-1 as coach Herve Renard continued his winning start as coach.
Tamires and Ary Borges scored in the first half as Brazil rebounded from their defeat at Wembley to beat Germany, second on FIFA’s women’s rankings, 2-1, in Nuremberg
Third-ranked Sweden drew 3-3 with Norway in Gothenburg. Olivia Schough gave the hosts the lead a minute into added time but Frida Maanum levelled with her second of the game, six minutes later.
Norwegian star Ada Hegerberg who refused to play in the last World Cup, limped off after 29 minutes.
Spain, ranked eighth, and Netherlands, ranked ninth, both enjoyed three-goal victories.
Spain beat China 3-0 on Ibiza and the Dutch beat Poland 4-1 in Rotterdam.