McFarlane, 33, was flung from his bike at the State Motorcycle Sports Complex at Broadford north of Melbourne during the third round of the MX National Motocross championships. He died at the scene.
Ambulance Victoria spokesman John Mullen said paramedics at the track worked on the injured man for more than an hour but were unable to revive him. All racing Sunday was later canceled, police said.
McFarlane returned to live in Australia last year after competing for nine years on the world motocross circuit in Europe and the United States. He had a career-high No. 2 ranking in 2005.
Motorcycling Australia confirmed the death in a statement Sunday.
"McFarlane received immediate treatment from medical staff at the track," the statement said. "MA and Victoria Police are now both investigating the incident.
"MA, Williams Event Management, and JDR Motorsport would like to express their sincerest condolences to the entire McFarlane family." MacFarlane, of Queensland state, was placed fifth in the 2010 MX Nationals ahead of Sunday's event. The event website says 2010 was likely to be McFarlane's final year racing.
