On 23 March 2012, at 09:25 UTC, an Mw 5.4 earthquake occurred in the eastern Musgrave Ranges of north‐central South Australia, near the community of Ernabella (Pukatja). Several small communities in this remote part of central Australia reported the tremor, but there were no reports of injury or significant damage. This was the largest earthquake recorded on mainland Australia in the past 15 years and resulted in the formation of a 1.6 km long surface deformation zone that included reverse‐fault scarps with a maximum vertical displacement of more than 0.5 m, extensive ground cracking, and numerous rock falls. The earthquake occurred in nonextended stable continental region (SCR) cratonic crust, more than 1900 km from the nearest plate boundary. Surface deformation from the Ernabella earthquake provides additional constraint on relations of surface‐rupture length to earthquake magnitude. Such relations aid in interpreting Australia’s rich record of prehistoric seismicity and contribute to improved estimates of SCR seismic hazard worldwide. Based upon an analysis of new and reinterpretation of existing surface‐rupture length data, faults in nonextended stable cratonic Australia appear to produce longer surface ruptures (for earthquakes larger than Mw∼6.5) than rupture lengths estimated using existing moment‐to‐rupture length scaling relations. The implication is that the estimated maximum, or characteristic, magnitude of paleoearthquakes in such settings may be overestimated where the estimate is based only on the length of the prehistoric fault scarp.