Over 320 plant species have been identified in Karawatha Forest. The Forest contains some of the last remaining wet heathlands and melaleuca swamps in Brisbane. Eucalyptus baileyana and Eucalyptus planchonia, which are rare in Brisbane, grow on the sandstone outcrops.

Karawatha Forest's infertile soils and sandstone ridges were formed by continual cycles of mountain building and erosion over many millions of years. Some of the sandstone outcrops were laid down in the Triassic-Jurassic age, when dinosaurs, not wallabies, grazed here.