While the majority of hydrological prediction methods assume that observed interannual variability explores the full range of catchment response dynamics, recent cases of prolonged climate drying suggest otherwise. During the ∼decade‐long Millennium drought in south‐eastern Australia significant shifts in hydrologic behavior were reported. Catchment rainfall‐runoff partitioning changed from what was previously encountered during shorter droughts, with significantly less runoff than expected occurring in many catchments. In this article, we investigate the variability in the magnitude of shift in rainfall‐runoff partitioning observed during the Millennium drought. We re‐evaluate a large range of factors suggested to be responsible for the additional runoff reductions. Our results suggest that the shifts were mostly influenced by catchment characteristics related to predrought climate (aridity index and rainfall seasonality) and soil and groundwater storage dynamics (predrought interannual variability of groundwater storage and mean solum thickness). The shifts were amplified by seasonal rainfall changes during the drought (spring rainfall deficits). We discuss the physical mechanisms that are likely to be associated with these factors. Our results confirm that shifts in the annual rainfall‐runoff relationship represent changes in internal catchment functioning, and emphasize the importance of cumulative multiyear changes in the catchment storage for runoff generation. Prolonged drying in some regions can be expected in the future, and our results provide an indication of which catchments characteristics are associated with catchments more susceptible to a shift in their runoff response behavior. Key Points We explain the variability in the magnitudes of shifts in the rainfall‐runoff partitioning observed during the decadal Millennium drought During decade‐long dry periods, the severity of hydrological drought is strongly influenced by the catchment biophysical structure Catchments susceptibility to shifts in hydrologic response was mostly related to predrought climate and catchment storage characteristics