A key determinant of insect persistence in marginal habitats is the ability to tolerate environmental extremes such as temperature. Aedes aegypti is highly invasive and little is known about the physiological sensitivity of the species to fluctuating temperature regimes at the lower critical threshold for development. A temperature that may limit the establishment and persistence of the species in sub-optimal regions. Daily winter temperatures were measured in common Australian larval habitats, replicated in environmental chambers and used to investigate the effect of fluctuating temperatures on the development and survival of tropical and subtropical strains of Australian Ae. aegypti. Development was slow for all treatments but both strains were able to complete development to the adult stage, suggesting previous models underestimate the potential for the species to persist in eastern Australia. Results suggested that thermal buffering in large volume habitats, and water that persists for greater than 32 days, will facilitate completion of the life cycle during sub-tropical winters. Furthermore, we provide a non-linear estimate of the lower critical temperature for Ae. aegypti development that suggests the current threshold may be incorrect. Our study demonstrates that the current re-introduction of water storage containers such as rainwater tanks, into major Australian population centres will increase the risk of Ae. aegypti establishment by permitting year-round development in locations south of its current distribution.