During the last week of May 1922, Lawrence and Frieda reached Sydney, Australia. He still disliked big cities, no matter how new or exciting, so they left Sydney as soon as they found Wyewurk, a seaside bungalow in Thirroul, a coastal village located about forty miles south in what is now a suburb of Wollongong. Built as a vacation home the previous decade and patterned on California-style bungalows, Wyewurk represents an important development in Australian architecture. This aptly named bungalow epitomizes the early development of recreational culture in Australia. Shortly after Lawrence and Frieda moved in, Frieda explained their house's name to a correspondent: “It's an ‘Australian’ joke, we believe, on Why Work!”

Although Lawrence appreciated the joke, he did not buy into the leisure the house represented. Like their cottage at Higher Tregerthen—another isolated house on a rugged coast—Wyewurk inspired him to work, something he had hardly done during their journey from Italy to Australia, which included a lengthy stay in Ceylon with Earl and Achsah Brewster, who had relocated there to study Buddhism more fully. While living at Wyewurk, Lawrence drafted Kangaroo, a novel set in Australia that uses the local political scene as its backdrop.

Kangaroo takes English poet and essayist Richard Lovatt Somers and his German wife Harriet—the closest Lawrence ever came to a literary portrait of himself and Frieda—to Sydney, where they hope to start life afresh. Their neighbor Jack Callcott draws Somers into a secret right-wing political movement of returned soldiers who want to seize power and overtake the Australian government. Somers shows little interest in the movement until he meets its leader, an attorney named Benjamin Cooley, whose odd personal appearance—long nose, close set eyes, and rotund belly—has earned him the nickname “Kangaroo.”

Kangaroo's personal magnetism allures Somers, who, like his creator, longs for a blood brother. Although he is attracted to him, Somers hesitates to commit himself to Kangaroo's political movement. He and Harriet leave Sydney and settle into Coo-ee, a seaside bungalow patterned on Wyewurk. Late in the story a riot erupts between Kangaroo's followers and members of the Labor movement, and Kangaroo is mortally wounded. Repulsed by the violence, Somers and Harriet soon leave Australia for the United States.