The stable longitudinal dunes in the northern Simpson Desert, Australia, were observed in satellite imagery to become more active after vegetation cover was reduced by fire and drought. Subsequent rainfall events also resulted in significant vegetation regrowth and dune stabilization. These switches between more active and stable conditions have not been previously described in the largely vegetated dune fields of central Australia. The observations, made on 12 dune sites, relied on high spatial resolution satellite imagery to observe dune crest activity, and seasonal Landsat fractional cover imagery to observe vegetation cover changes. The non‐photosynthetic vegetation (NPV) component of the fractional vegetation cover images revealed significant changes in hummock grass cover on the dunes between 1988 and 2018, with a positive relationship with the three‐year cumulative rainfall, disrupted by two periods of patchy burning. Only those sites that had burnt became active, and only after vegetation cover had remained low (NPV < 16%) during the ‘Millennium Drought’. There is no threshold in vegetation cover, below which dune crests become active, but active dune features require four‐years of low NPV cover (< 16%) to develop. The large rainfall event that ended the drought increased NPV cover, stabilizing the dunes. Similar hummock grass covered dunes are present across large areas of the arid zone, and are likely to respond in similar ways, given that fire and drought are common occurrences in Australia. © 2019 John Wiley & Sons, Ltd. © 2019 John Wiley & Sons, Ltd.