Way up in the northwestern corner of Australia, about 2,500 miles from Sydney, sits a sprawling, sun-scorched region known as the Kimberley. It's a sparsely populated zone of rugged desert terrain where crocodiles roam and temperatures regularly reach upward of 100 degrees. This harsh, unforgiving swath of outback is about as far as you can get from the cushy world of moviemaking no five-star resorts in these parts yet it was here that Baz Luhrmann spent three months shooting his upcoming epic, Australia. ''It was so remote, it was like filming on the moon,'' says Hugh Jackman. There were days when Luhrmann and his crew had to shoot a herd of horses leading a stampede of 1,500 cattle. And other days when, thanks to a nationwide outbreak of equine flu, there were no horses at all. ''Epic means big in scale, and this experience was epic,'' says the Moulin Rouge! director. ''Nothing that happened on this film was small. You're up there in 110-degree heat, and everyone's going crazy, and you just hit a point where you say, 'Bring it on, man!'''
Did we expect anything less from a man who couldn't resist putting an exclamation point in the title of his last movie? His first effort in seven years stars Nicole Kidman as a prim English aristocrat who, on the eve of World War II, travels to Australia to sell the cattle farm that her philandering husband has mismanaged. Instead, she ends up falling in love with both the wild terrain and a lone-wolf cowboy known as the Drover (Jackman). A sweeping, romantic adventure, Australia aims to combine the grandeur of movies like Lawrence of Arabia with the frontier spirit of American Westerns, and announces a new phase in Luhrmann's career. If the three films in his Red Curtain trilogy Strictly Ballroom, Romeo + Juliet, and Moulin Rouge! were genre-busting, sensory-overload spectacles, this one is rooted in a more classic, old-Hollywood style. Budgeted at a reported $130 million, it is Luhrmann's most ambitious undertaking yet not to mention his country's biggest homegrown production ever. (The cast and crew are almost exclusively Aussie.) ''Baz makes very few films, but when he does, he puts his heart and soul into it,'' says Kidman, 41, who earned her first Oscar nomination for Moulin Rouge! ''He's not churning anything out. It's very much coming from within his blood.''
Australia was not the first project Luhrmann planned to tackle after 2001's Moulin Rouge! That was his Alexander the Great biopic, which was to star Kidman and Leonardo DiCaprio. Luhrmann and his wife, Catherine Martin (who is the production designer on all his films), had been prepping the feature for more than a year when, in 2003, Oliver Stone beat them into production with his own Alexander. Luhrmann opted to postpone his version indefinitely, even though producer Dino De Laurentiis had begun building sets in the Sahara. ''For a major work to almost happen and then not, that did leave a real hole,'' says the filmmaker, 45. The couple, who were living in Paris at the time, decided to move back to Sydney so that their baby daughter could call Australia home. (They also had a son in 2005.) That simple idea of ''home'' convinced the director it was time to take on another project that had been ''kicking around'' in his head for nearly 20 years: an Australian epic.
Luhrmann has been a fan of American Westerns and big, David Lean-style dramas since childhood, and when he became a filmmaker, he remembers thinking, ''We've got a kind of Wild West. Wouldn't it be great to see an iconic, mythological story set in the far North?'' In addition to the Kimberley, the country as a whole captured the sense of exotic, far-flung romance Luhrmann wanted. ''For the global audience, Australia is still this amorphous land on the edge of the world,'' he says. And of course, he explains, ''part of my motivation was to work with some of our Australian actors.''
By June 2006, Luhrmann had a studio (Twentieth Century Fox, which had released his last two movies), a script (co-written by Collateral's Stuart Beattie), and a leading lady eager to reunite with her Moulin Rouge! director. ''Baz just knows me inside out,'' says Kidman. ''So much of [our bond] is me saying, 'I believe in your artistic vision, and I'll walk anywhere with you.''' Nailing down the leading man, however, was not so easy. New Zealand-born Russell Crowe, who was initially cast as the Drover, dropped out in May 2006 due to salary disputes with Fox. ''I don't do charity work for major studios,'' he said at the time. (Crowe's publicist declined to comment.) ''That was a really complicated, tangled web,'' says Luhrmann, who quickly adds that he bears the actor no ill will. After Crowe's departure, Luhrmann worried that ''once again the stars were not aligned,'' and that Australia would go the way of Alexander the Great. But then he realized there was another bankable Aussie leading man out there one who was, at that very moment, helping X-Men: The Last Stand become a $234 million-grossing blockbuster. Plus, Jackman was already considering a secondary role in Australia. ''I don't mind if I'm off-the-bench second, third, reserve doesn't matter,'' says the actor, 39. ''I just didn't want to miss out on being a part of the film.''
To prepare for the role of a rugged cattleman, Jackman spent the rest of that year improving his (meager) horseback-riding skills. ''That's the first thing you learn about acting: Say you can horse ride, no matter what,'' he laughs. ''When I read the script, I realized, Okay, I can't lie. I have to look like I've been on a horse since I was 2 or 3 years old.'' The equine-flu fiasco, which hit right after production reached the tiny northern town of Kununurra in summer 2007, required rejiggering the schedule. But eventually, Jackman and Kidman both got plenty of time in the saddle. (''I could have won the Kentucky Derby!'' Jackman says of one scene in which he rode a particularly speedy steed.) For the famously sun-shy Kidman, Kununurra's ''brutal and harsh'' climate complemented her character's fish-out-of-water story line. ''I'm meant to be this very fragile Englishwoman, and that's exactly how I felt!'' she says. It wasn't until the end of the shoot, when production was wrapping up on a Sydney soundstage, that Kidman discovered she was expecting her first child with husband Keith Urban. ''After I'd been riding horses like a madwoman!'' says the actress, who gave birth to a daughter, Sunday, on July 7. ''The film, the baby I don't think I'll ever have anything like it again.''
Well, at least not until she reteams with Luhrmann. ''If he offers me some little role in the next film, I'd do it,'' Kidman says. Problem is, Luhrmann himself hasn't decided what that next project is. And after making two movies together that have coincided with life-changing moments in the actress' life lest we forget, Kidman was going through her divorce from Tom Cruise at the end of Moulin Rouge! they're starting to get a little superstitious. ''We keep joking with each other that we really can't make another movie together because every time we do, it's never without drama!'' Luhrmann laughs. From now on, they'll try to keep it all on screen.