Australia's top intelligence agency in the past year uncovered a "hive" of foreign spies and had them removed from the country.
The operation was revealed by Australian Security Intelligence Organisation boss Mike Burgess in his latest annual threat assessment, delivered in Canberra on Tuesday.
Mr Burgess said more Australians were being targeted through espionage and foreign interference than at any time in the country's history.
"Australia is facing an unprecedented challenge from espionage and foreign interference," he said.
"And I'm not convinced we, as a nation, fully appreciate the damage it inflicts on Australia's security, democracy, sovereignty, economy and social fabric."
Mr Burgess said spies operating within what he described as a "hive" were working undercover, with some put in place years earlier.
Proxies and agents were recruited as part of a wider network.
"Among other malicious activities, they wanted to steal sensitive information," Mr Burgess said.
"We watched them. We mapped their activities. We mounted an intense and sustained campaign of operational activity.
"We confronted them. And, working with our partners, we removed them from this country, privately and professionally. The hive is history."
He said the security environment was complex in that foreign powers could be simultaneously interfering, spying and setting up for sabotage.
It was also challenging, with foreign adversaries becoming more sophisticated and being "effectively unconstrained by resources, ethics or laws".
The work of intelligence officers required changes in capabilities as geopolitics shifted, new technologies emerged and extreme views, conspiracies and grievances grew online, he said.
He said he was concerned there were "senior people" in Australia who appeared to believe espionage and foreign interference was "no big deal".
The critics offered such reasons as "all countries spy on each other".
"In my opinion, anyone saying these things should reflect on their commitment to Australia's democracy, sovereignty and values - because espionage and foreign interference is deliberately calculated to undermine Australia's democracy, sovereignty and values," Mr Burgess said.
"Based on what ASIO is seeing, more Australians are being targeted for espionage and foreign interference than at any time in Australia's history.
"More hostile foreign intelligence services, more spies, more targeting, more harm, more ASIO investigations, more ASIO disruptions. From where I sit, it feels like hand-to-hand combat."
Foreign intelligence services were aggressively seeking secrets about Australia's defence capabilities, government decision-making, political parties, research, key export industries and personal information, especially bulk data.
Judicial figures had also been approached, he said.
"While we are yet to conclusively conclude they were targeted by foreign intelligence services, we do know spies want insights into court cases relevant to their governments and are seeking to use litigation as an intelligence collection tool."
He noted an uptick in journalists being targeted by spies using diplomatic or media cover, or posing as sources.
In one incident, which was stopped by ASIO before it was carried out, an Australian-born person who was "well-connected and well-regarded in business and political circles" drew up a list of influential journalists and planned to offer them all-expenses paid study tours of a foreign country.
It was then intended to introduce the travelling journalists to "local officials", who were spies seeking to ingratiate themselves with the reporters and gather information on political, economic, defence and other issues.
"Almost certainly, the journalists' phones, laptops and tablets would also have been targeted," Mr Burgess said.
He warned academics, defence contractors and MPs could face similar targeting and must be cautious when offered study tours.
