The east coast, from the tropics to Gippsland. The Australian Faunal Directory gives the Russell River south of Cairns to the Gippsland Lakes, and possibly west to Port Phillip Bay, and lists the species as an Australian endemic. NSW DPIRD gives the same span, Cairns to the Gippsland Lakes.
Within that range it is an estuary fish. Fishes of Australia describes sandy and silty areas in estuaries, coastal bays and sheltered reefs, occasionally entering rivers. NSW DPIRD adds mud, gravel and seagrass, and says the fish can live in estuarine water right up to the tidal limit and are more commonly caught in summer.
In Victoria the species is being helped along. The Victorian Fisheries Authority began stocking dusky flathead in East Gippsland in 2021 under the Gippsland Lakes Recreational Fishery Plan, and in March 2024 said more than 155,000 had gone into the Gippsland Lakes and waters further east, among them Bemm River and Gypsy Point near Mallacoota.