Dengue is the world's most prevalent mosquito-borne disease, with more than 200 million people each year becoming infected. We used a mechanistic virus transmission model to determine whether climate warming would change dengue transmission in Australia. Using two climate models each with two carbon emission scenarios, we calculated future dengue epidemic potential for the period 2046–2064. Using the ECHAM5 model, decreased dengue transmission was predicted under the A2 carbon emission scenario, whereas some increases are likely under the B1 scenario. Dengue epidemic potential may decrease under climate warming due to mosquito breeding sites becoming drier and mosquito survivorship declining. These results contradict most previous studies that use correlative models to show increased dengue transmission under climate warming. Dengue epidemiology is determined by a complex interplay between climatic, human host, and pathogen factors. It is therefore naive to assume a simple relationship between climate and incidence, and incorrect to state that climate warming will uniformly increase dengue transmission, although in general the health impacts of climate change will be negative.