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Understanding sea level during the peak of the Last Interglacial (125,000 yrs ago) is important for assessing future ice-sheet dynamics in response to climate change. The coasts and continental shelves of northeastern Australia (Queensland) preserve an extensive Last Interglacial record in the facies of coastal strandplains onland and fossil reefs offshore. However, there is a discrepancy, amounting to tens of meters, in the elevation of sea-level indicators between offshore and onshore sites. Here, we assess the influence of geophysical processes that may have changed the elevation of these sea-level indicators. We modeled sea-level change due to dynamic topography, glacial isostatic adjustment, and isostatic adjustment due to coral reef loading. We find that these processes caused relative sea-level changes on the order of, respectively, 10 m, 5 m, and 0.3 m. Of these geophysical processes, the dynamic topography predictions most closely match the tilting observed between onshore and offshore sea-level markers.