Current large-scale deforestation poses a threat to ecosystems globally, and imposes substantial and prolonged changes on the hydrological and carbon cycles. The tropical forests of the Amazon and Indonesia are currently undergoing deforestation with catastrophic ecological consequences but widespread deforestation events have occurred several times in Earth’s history and these provide lessons for the future. The end-Permian mass-extinction event (EPE; ∼252Ma) provides a global, deep-time analogue for modern deforestation and diversity loss. We undertook centimeter-resolution palynological, sedimentological, carbon stable-isotope and paleobotanical investigations of strata spanning the end-Permian event at the Frazer Beach and Snapper Point localities, in the Sydney Basin, Australia. We show that the typical Permian temperate, coal-forming, forest communities disappeared abruptly, followed by the accumulation of a 1-m-thick mudstone poor in organic matter that, in effect, represents a ‘dead zone’ hosting degraded wood fragments, charcoal and fungal spores. This signals a catastrophic scenario of vegetation die-off and extinction in southern high-latitude terrestrial settings. Lake systems, expressed by laterally extensive but generally less than a few-metres-thick laminated siltstones, generally lacking bioturbation, hosting assemblages of algal cysts and freshwater acritarchs, developed soon after the vegetation die-off. The first traces of vascular plant recovery occur ∼1.6m above the extinction horizon. Based on analogies with modern deforestation, we propose that the global fungal and acritarch events of the Permo-Triassic transition resulted directly from inundation of basinal areas following water-table rise as a response to the abrupt disappearance of complex vegetation from the landscape. The δ13Corg values reveal a significant excursion toward low isotopic values, down to −31ppt (a shift of ∼4deg), across the end-Permian event. The magnitude of the shift at that time records a combination of changes in the global carbon cycle that were enhanced by the local increase in microbial activity, possibly also involving cyanobacterial proliferation. We envisage that elevated levels of organic and mineral nutrients delivered from inundated dead forests, enhanced weathering and erosion of extra-basinal areas, together with local contributions of volcanic ash, led to eutrophication and increased salinity of basinal lacustrine–lagoonal environments. We propose that the change in acritarch communities recorded globally in nearshore marine settings across the end-Permian event is to a great extent a consequence of the influx of freshwater algae and nutrients from the continents. Although this event coincides with the Siberian trap volcanic activity, we note that felsic–intermediate volcanism was extensively developed along the convergent Panthalassan margin of Pangea at that time and might also have contributed to environmental perturbations at the close of the Permian.