Filipo Daugunu's two tries ensured Australia edged a thrilling encounter with Wales 36-28 to extend Warren Gatland's side's losing streak to nine matches.
Daugunu secured the triumph 12 minutes from time in Melbourne as Wales were punished for making several costly errors.
A bright Wales start was punctuated when Daugunu opened the scoring, capping off a slick Australia move that started on their own line.
The Wallabies raced into a 17-point lead through Jake Gordon's score, but Wales got themselves back into contention via a driving maul as Dewi Lake bundled over.
Noah Lolesio converted a penalty shortly after for the hosts, but Wales would take advantage of Lukhan Salakaia-Loto's sin bin when Lake doubled his tally.
Liam Williams reduced the deficit to two points shortly after the break, only for Australia to regain control through Allan Alaalatoa's first try in 69 Tests.
Daugunu's second of the game late on put Australia further ahead, but Rio Dyer found a way over following the restart to set up a nervy finish at AAMI Park.
However, it proved to be too big of a mountain to climb, with Wales now preparing for their next Test against Fiji in Cardiff in November, and the pressure is on Gatland.
Data Debrief: Wales' woeful run rolls on
Wales' defeat in Melbourne was their ninth in a row, with their last victory a group-stage win over Georgia at the 2023 World Cup. It is the Dragons' worst run since 2003 under Steve Hansen.
The Dragons also have a dismal record Down Under. They have not beaten the Wallabies in Australia since 1969.