The warning follows this weekend's terror attacks in London, which were claimed by the Islamic State group, and amid a growing jihadist threat in the Philippines.
IS fighters will "come back with battlefield skills, they'll come back with hardened ideology, they'll come back angry, frustrated, and we need to be very aware of that," Australian Defence Minister Marise Payne said.
She was speaking at the start of an Australia-US ministerial summit also attended by Pentagon chief Jim Mattis, US Secretary of State Rex Tillerson and his Australian counterpart Julie Bishop.
US President Donald Trump has instructed the Pentagon to "annihilate" IS in a bid to prevent escaped foreign fighters from returning home as they lose ground in Iraq and Syria.
The move to encircle then kill as many jihadists in place as possible -- rather than letting them exit a city and targeting them as they flee -- reflects an increased urgency to stop them bringing their military expertise and ideology back to Western capitals and other areas.
"The global terrorist threat is ever evolving, we've seen brutal attacks in a number of European cities, we've thwarted attacks here in Australia, and so we want to discuss with you the links back into the Middle East," she said.
Australian officials say they have prevented 12 terror attacks on home soil since 2014 with more than 60 people charged.
In the Philippines, hundreds of civilians are trapped by fighting between the military and Islamist militants who have overrun the city of Marawi on the restive southern island of Mindanao.
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