This paper considers the professionalization of literary studies in Australian universities. It traces ways in which its interdisciplinary formations have been shaped not only by the cultural contexts of colonialism and postcolonialism, but also by institutional factors and budgetary pressures. Nevertheless, it argues this framework has also created intellectual opportunities for positively reshaping the subject so as to bring it into discursive conversation with cognate fields. It suggests that the repositioning of Australian literature and literary studies in relation to World Literature may offer the prospect of opening up the field for the benefit of scholars the world over.