The 21st century displays numerous security challenges for the Indo-Pacific region, notably regarding critical maritime infrastructure (CMI) vulnerabilities. Situated at the crossroads of intense US-China strategic competition, Australia offers a compelling case study for analysing these evolving dynamics. Grounded in the country's unique foreign policy tradition and pragmatic middle power status, this paper explores Canberra's complicated regional positioning amidst intensifying grey-zone operations. First, it contextualises Australia’s foreign policy trajectory in the region. Second, it outlines both hybrid challenges and grey-zone tactics in the Indo-Pacific. Third, it assesses the multidimensional challenges posed to Australia’s CMI, focusing on highly vulnerable nodes such as commercial ports, shipping terminals, and subsea fibre-optic communication cables. Lastly, it provides several recommendations to strengthen Australia’s CMI, based on comparable contexts in other areas of both the Indo-Pacific and Europe. The research finds that, despite their vital geopolitical and geoeconomic significance, Australia’s coastal and undersea assets remain exposed to deniable and non-conventional disruptions, which could be partially addressed through implementation of tailored counter-hybrid mechanisms. By shedding light on unfolding and yet under-examined challenges, the paper aims to foster new debates on Australian foreign policy, Indo-Pacific studies, and hybrid challenges.