Tasmanian-born Corporal Richard Atkinson, 22, was killed while on patrol in Uruzgan province last week.
Soldiers from the 1st Combat Engineer Regiment formed a guard of honour along with the Chief of Defence and the Chief of Army at a ramp ceremony at Darwin's RAAF base.
A bag-piper and drummer led the pallbearers carrying the coffin down the ramp and on to Australian soil.
Corporal Atkinson's family was at the base for the ceremony. They had requested his body be brought first to Darwin, the home of his fiance.
Two of the corporal's closest friends travelled with the body from Afghanistan.
A funeral service will be held in Tasmania.
He has been remembered as a dedicated soldier, committed to his job, friends and family.
Another Australian soldier, Sapper Robert Rose, was wounded in last week's incident.
Defence says an inquiry will be held into the incident and its findings will be made public.
Twenty-two Australian soldiers have been killed since troops were sent to Afghanistan in 2001.
Corporal Atkinson leaves behind a fiance, parents in Tasmania and a brother in Western Australia.