This paper reports physical and psychophysical investigations of the discriminability of Australian banknotes, prior to release of the current $5 note in 1995, and proposes methods for assessing distinctiveness within any set of coloured banknotes. Average note colour was measured under the CIE standard illuminants A, B, C, D65 and F2, and the positions of the notes in three-dimensional CIELAB colour space were plotted as a means of determining relative closeness by way of the Δ-difference measure of proximity in colour space. Building on hypotheses derived from the physical measurements, four psychophysical experiments were carried out. Experiment 1 required participants to judge sameness and difference of computer-presented images of notes while the dimensions of colour, design and size were manipulated. In Experiment 2, participants sorted notes under two levels of illumination and the dimensions of colour and design were again manipulated. Experiment 3 required participants to decide whether a computer-presented image of a note was one designated by the experimenter, and Experiment 4 had participants detecting target notes in computer-presented, simulated wallets. Results supported the release of the new re-coloured $5 note and demonstrated its superior discriminability over that of the old and now discontinued $5 note. Results are also discussed in the context of ongoing theoretical issues in multidimensional stimulus discrimination. [ABSTRACT FROM AUTHOR]