The setting is Australia. In the previous year, a short nuclear war had erupted, devastating most of the populated world, polluting the atmosphere with nuclear fallout, and killing all human and animal life in the Northern Hemisphere. The war began with a nuclear attack by Albania on Italy. Egypt attacked Israel with a nuclear weapon, destroying Tel Aviv, and the United States and the United Kingdom attacked Egypt. That sparked war between NATO and the Soviet Union, after which the Soviets and China destroyed each other. Some 4000 cobalt and other "superbombs" have been detonated.

Global air currents are slowly carrying the lethal nuclear fallout to the Southern Hemisphere. The only parts of the planet still habitable are Australia, New Zealand, South Africa, and the southern parts of South America.

Historian David McCullough, writing for The New York Times, called On the Beach "the most haunting evocation we have of a world dying of radiation after an atomic war."