The boy and girl, ages 5 and 7, watched as the scrub python devoured their silky terrier-Chihuahua crossbreed Monday at their home near Kuranda in Queensland state.
Stuart Douglas, owner of the Australian Venom Zoo in Kuranda, said scrub pythons typically eat wild animals such as wallabies, a smaller relative of the kangaroo, but sometimes turn to pets in urban areas.
"It actively stalked the dog for a number of days," Douglas said.
"The family that owned the dog had actually seen it in the dog's bed, which was a sign it was out to get it," he added.
"They should have called me then, but (the snake) got away and three or four days later, I was called and went around and removed it" after the dog had been killed, Douglas said.
By the time Douglas arrived, all that could be seen of the dog was its hind legs and tail.
The zoo manager, Todd Rose, said pythons squeeze their prey to death before swallowing it whole. The 5-year-old dog would have been suffocated within minutes.
"The lady who was there threw some plastic chairs at the snake, but you've got to remember that this is about 50 kilograms (110 pounds) of aggressive muscle," Rose said.
Removing the half-swallowed dog could have harmed or even killed the python, Rose said, because dogs have sharp teeth and claws that could do the snake internal damage if it were wrenched out.
The snake was still digesting the dog at the zoo Wednesday. It will soon be relocated to the bush, Douglas said.