Southwestern Australia has experienced recent climate change, with an increase in air temperature of 0.6 °C and a reduction in mean annual precipitation of −15% since 1970. Along with the warming and drying trends, dramatic declines of streamflow have occurred across the region. However, both forest mortality and an increase in leaf area index have been observed in the southwestern forest, suggesting varied responses of vegetation to climate change. In this study, 30 catchments were analyzed using the Mann-Kendall trend test, Pettitt's change point test and the theoretical framework of the Budyko curve to study the rainfall-runoff relationship change, and effects of climate and land cover change on streamflow. A declining trend and relatively consistent change point (2000) of streamflow were found in most catchments, with 14 catchments showing significant declines (p < 0.05, −68.1% to −35.6%) over 1970–2000 and 2001–2015. Most of the catchments have been shifting towards a more water-limited climate condition since 2000. For the period 1970 to 2015, the dynamic of vegetation attributes (land cover/use change and growth of vegetation) dominated the decrease of streamflow in about half the study catchments. In general, a coequal role of climate and vegetation on the decline in streamflow was found in the study, suggesting the importance of vegetation management on future water management and production. Precipitation is predicted to decline in the future; therefore, some forest management intervention is required to maintain forest growth and water supply in the southwest of Australia.