The Late Quaternary is a crucial period marked by glacial-interglacial cycles that significantly impacted global paleoceanography and paleoclimate, making the reconstruction of terrigenous input in the southeastern Indian Ocean vital for understanding these shifts. We present a terrigenous sediment record from International Ocean Discovery Program Site U1516 in the offshore Mentelle Basin, reconstructing sediment provenance, transport mechanisms, and paleoclimate variability over the last 766 ky (MIS18-1). Grain-size analysis reveals a silt-dominated assemblage, with median grain size coarsening during glacial periods, reflecting enhanced winnowing of fine particles, while elevated clay concentrations suggest greater resistance to winnowing and increased supply from shallow shelves due to sea-level decline. Clay mineral assemblages show dominance of kaolinite and illite during interglacials, contrasting with peaks in smectite and chlorite during glacials. These patterns are attributed to sources in southwestern Australia transported by the Leeuwin Current, which delivered more kaolinite and illite during intensified interglacials and shifted to finer-grained smectite during weakened glacials. Elevated chlorite during glacials likely derives from deep marine settings south of Australia or Antarctica, transported via Antarctic Intermediate Water and Leeuwin Undercurrent. This variability highlights glacial-interglacial shifts in sediment routing tied to ocean circulation changes. Contrary to earlier observations of ‘dry glacials’ in southern Australia, data from Hole U1516B (illite crystallinity, chemical indices) reveal the presence of both wet and dry periods during glacials that were previously assumed to be solely dry, aligning with speleothem records but conflicting with bulk geochemical interpretations. This highlights the need for proxy-specific calibration. Interglacial periods also show intensified wetter intervals similar to those during glacials. These glacial-interglacial wetter intervals are likely driven by latitudinal shifts in the Southern Hemisphere westerly winds. This study provides new insights into glacial-interglacial transitions, linking oceanic circulation shifts, sediment transport dynamics, and hydroclimate variability in southwest Western Australia.