Azalea and Furler have four nominations each and are the outright favourites, or among the top picks, in their categories.
In a tantalising battle, they go head-to-head for the marquee Record of the Year at Sunday's (Monday AEDT) ceremony in downtown Los Angeles.
Keith Urban is also nominated for two country music Grammys.
If the Mullumbimby-raised Azalea does secure a Grammy, particularly for Best Rap Album, expect a tornado of protest from sections of the rap and US music industry yet to accept the artist described recently by the Washington Post's pop music critic as "a white, 24-year-old Barbarella from Australia who raps with the inflection of a black girl from Atlanta".
Last year there were howls when white rapper Macklemore claimed the Best Rap Album Grammy over Jay-Z, Kanye West, Drake and Kendrick Lamar.
On the eve of this year's Grammys the most viewed story on Vulture.com was titled: "Please, Don't Let Iggy Azalea Win Best Rap Album".
"It's not that she's white - it's that she's a white girl turning her 'blaccent' on and off with a disturbing ease," Vulture's Lindsay Zoladz wrote.
If Azalea, also nominated for Best New Artist and Best Pop Duo/Group Performance, does get an opportunity to deliver an acceptance speech on stage inside the 20,000 seat indoor Staples Center, she may address her detractors.
Furler, also nominated in Song of the Year, Best Pop Solo Performance and Best Music Video, likely will opt not to give an acceptance speech if she wins a Grammy.
The publicity-shy Adelaide singer-songwriter, who has worn brown paper bags on her head to hide her face, could follow the Oscar lead of Marlon Brando and send a proxy to accept her trophy.
Brando infamously asked Native American actress Sacheen Littlefeather to go on stage at the 1973 Academy Awards to accept his best actor Oscar for The Godfather.
Furler has been using 12-year-old American dancer Maddie Ziegler as a proxy in TV performances and music videos.
Furler recently admitted in a Twitter post she "anticipated some 'pedophilia' cries" when Ziegler appeared with 28-year-old Hollywood actor Shia LeBeouf in her music video for new song Elastic Heart.
It will also be interesting to see how Furler will attempt to hide her face when she performs on stage during the Grammy ceremony.
Will she wear a bag on her head, do the usual back to the audience performance or come up with another way to hide?
Challenging Furler and Azalea for Record of the Year is Sam Smith, Taylor Swift and Meghan Trainor.
Overall, Smith, Beyonce and Pharrell Williams top the Grammy nominations with six each.
Urban is nominated for Best Country Solo Performance and Best Country Duo/Group Performance.
The Grammy Awards are divided into two ceremonies, with most awards announced from 7am AEDT Monday and the main, televised ceremony from midday Monday AEDT.
FACTBOX - 2015 AUSSIE GRAMMY NOMINEES
Iggy Azalea
- Record of the Year (Fancy)
- Best New Artist
- Best Pop Duo/Group Performance (Fancy with Charli XCX)
- Best Rap Album (The New Classic)
Sia Furler
- Record of the Year (Chandelier)
- Song of the Year (Chandelier)
- Best Pop Solo Performance (Chandelier)
- Best Music Video (Chandelier)
Keith Urban
- Best Country Solo Performance (Cop Car)
- Best Country Duo/Group Performance (Raise 'Em Up with Eric Church)
