Recent and ongoing work in the reconstruction of the Proto-Austronesian lexicon has shown an unusual paucity of stems that have an initial nasal consonant. There are a number of possible reasons for this, but one is denasalization, or the loss of the nasal contrast due to sound change. I will present evidence from the typology of denasalization, from internal variation within Austronesian, and from external comparanda that have initial nasals that are lacking in the corresponding Proto-Austronesian word. These together will provide strong support for the hypothesis of sound change as an explanation for the distribution of nasals in Proto-Austronesian. The presence of denasalization in Austronesian's early history has important implications both for the study of sound change in general, and for comparative linguistics in Southeast Asia as well.