The present paper reviews the Heteroclinus heptaeolus complex known only from temperate regions of Australia. Five species are recognised, with three of the species described as new, H. colemani, a deep bodied species often found around red algae, H. whitleyi, with two disjunct populations and a species very close to and sympatric with H. heptaeolus (Ogilby), H. longicauda, a slender species, lacking an orbital tentacle. In addition, Heteroclinus wilsoni (Lucas) is recognised as a distinct species and a neotype is selected. The species are separated on the bases of live coloration, pectoral ray, dorsal spine and anal ray counts, gill raker counts, development of orbital tentacle, first dorsal fin height and body depth. Analysis of measurements indicates that proportions commonly used to separate species are often unreliable, because of high variation and significant changes with size. Proportions were found to not be good estimates of the slope of the regression line of various characters with the standard length.