The 1932 Australian Grand Prix was a motor race held at the Phillip Island circuit in Victoria, Australia on 14 March 1932. It was the fifth Australian Grand Prix and the fifth to be held at Phillip Island. The race was organized by the Light Car Club of Australia, formerly known as the Victorian Light Car Club, and was limited to cars having an engine with a piston displacement of 2000cc or less. It was the first Australian Grand Prix to be decided on a straight handicap basis, with the winner being the first car to complete the 31 laps. The two "scratch" competitors had to concede starts ranging up to 29 minutes, equating to an advantage of four laps. The previous practice of cars contesting four classes was discontinued. Weather conditions were reported to be "ideal". The race, in which there were 18 starters, was won by Bill Thompson driving a Bugatti. Thompson was also awarded the Herald Trophy for recording the fastest time of the race.

Classification

(#) Sidebottom's Singer was excluded at scrutineering. (##) The Austin 12 of Compton Jones was withdrawn after its engine suffered a piston failure during practice.