Prior to European settlement, the Dharawal people, as custodians of their land, used cultural fire practices involving low-intensity fire regimes. While these practices were more prevalent in open woodlands and grasslands, they also influenced the edges of subtropical rainforests, promoting a mosaic of vegetation and reducing the risk of large-scale fires in fire-sensitive areas. This sustainable approach maintained the natural balance of the rainforest. 

The arrival of European settlers in the late 18th and early 19th centuries marked the beginning of significant changes. The fertile volcanic soils of the Illawarra Escarpment attracted farmers, and large portions of subtropical rainforest were cleared for agricultural purposes, particularly for dairy farming and cropping. By the mid-1800s, vast areas of lowland rainforest had been cleared to support agricultural expansion, especially in places like Jamberoo, Kiama, and Albion Park. By the early 1900s, less than a quarter of the original forest remained.

Simultaneously, the rainforests were heavily exploited for valuable timber resources. The Illawarra region was a prime source of Red Cedar (Toona ciliata), which was felled extensively for use in construction and furniture. The removal of red cedar and other large hardwood species had a profound effect on forest structure and biodiversity. Logging in the region persisted into the early 20th century, significantly reducing old-growth rainforests.

From 1840 to 1900, Red Cedar was logged so intensively that it was almost completely removed from the Illawarra rainforests. The rapid depletion of these trees destabilised the rainforest ecosystem, making it more susceptible to erosion and loss of biodiversity.

Throughout the 20th century, coal mining, particularly on the Illawarra escarpment, was a major driver of deforestation and habitat destruction. Both open-cut and underground mining operations not only cleared large areas of rainforest but also degraded soil quality and polluted waterways, which disrupted the delicate balance of the ecosystem. For example, the Mount Kembla Mine, operational since 1880, and subsequent mining expansions caused significant fragmentation of rainforest habitats. This led to increased soil erosion and watercourse degradation, which compounded the negative impacts on surrounding subtropical rainforest ecosystems, reducing biodiversity and altering water flow patterns. 

Urbanisation has significantly impacted the Illawarra-Shoalhaven subtropical rainforest, particularly from the mid-20th century onward. The expansion of Wollongong and surrounding coastal areas led to widespread land clearing, reducing forest cover and fragmenting ecosystems. For example, post-World War II development in the 1950s and 1960s accelerated urban sprawl, as housing, roads, and industrial infrastructure encroached on the natural environment. By the 1970s, significant sections of rainforest had been lost to urban development, which further isolated patches of forest and increased vulnerability to environmental threats such as invasive species and pollution. 

Urban expansion in the Illawarra-Shoalhaven region is somewhat constrained by the steepness of the escarpment, which limits available flat land for development. As a result, urban growth tends to occur along the coastal areas and valleys, leading to the fragmentation of remaining rainforest patches. Although urban sprawl is restricted, any development that does occur still impacts the rainforest by introducing runoff, pollutants, and invasive species, while increasing the pressure on already vulnerable habitats. 

Myrtle Rust (Austropuccinia psidii) is an invasive fungal disease that poses a significant threat to the subtropical rainforests of the Illawarra-Shoalhaven region. It was first identified in Australia in 2010, likely arriving from South America. This pathogen primarily affects plants in the Myrtaceae family, including key rainforest species like Lilly Pilly (Syzygium spp.) and the critically endangered Scrub Turpentine (Syncarpia glomulifera).

Myrtle rust infects young leaves, buds, and stems, leading to symptoms such as leaf blight, defoliation, and reduced reproductive success. In the case of Scrub Turpentine, which is a dominant species in these rainforests, infection can result in severe health decline, impacting its growth and ability to provide habitat and food for local wildlife. The loss of Scrub Turpentine affects not only the plant's ecosystem role but also the various fauna that depend on it for shelter and sustenance.