Fluoridation of community water supplies constitutes the main public health strategy for prevention of dental caries in Australia. In recent years questions have been raised about the effectiveness of water fluoridation. The aim of this paper was to examine differences in caries experience of children aged 5 to 12 years who were lifetime residents either of Brisbane (the unfluoridated Queensland capital) or Townsville (fluoridated since 1965). Children from each city were sampled from patients of the school dental service. Dental therapists and dentists from the school dental service recorded data describing dental caries experience and parents were asked to complete a questionnaire about their children's residential history and exposure to other fluorides. Of the 18,348 children sampled, 10,195 (55.6 per cent) provided completed questionnaires, and 4588 were lifetime residents of their respective cities. Caries rates were significantly lower (P < 0.01) among children in Townsville than in Brisbane, both in the deciduous dentition (according to age 32 to 55 per cent fewer tooth surfaces affected) and permanent dentition (20 to 65 per cent fewer tooth surfaces affected). Significantly lower rates in Townsville persisted (P < 0.01) in multivariate analyses that controlled for oral hygiene practices, exposure to fluoride supplements and household income. Water fluoridation appears to provide a substantial public health benefit for children in Townsville.