The ability of black mudfish (Neochanna diversusStokell) to withstand hypoxia and drought was examined by observing an isolated population near Hamilton, New Zealand over the course of a year (September 1988‐November 1989). In addition, a series of experiments were performed to determine what dissolved oxygen levels trigger air‐breathing in the black mudfish, and the length of time this species can survive out of water in a humid environment. Air‐breathing behaviour in black mudfish involves rising to the surface, gulping an air bubble and holding the bubble in the buccal cavity while the fish continues gill ventilation. Water in the study drain started to become hypoxic in mid November and by early December oxygen levels were <3.0 mg litre‐1on the surface and <1.0 mg litre‐1near the bottom (15 cm deep). In the laboratory, at water temperatures ranging from 20 to 22°C, none of the 20 test fish gulped air from the surface until oxygen levels dropped below 2.5 mg litre‐1; c. 45% of the animals began air‐gulping at oxygen levels between 2.0 and 2.5 mg litre‐1and, at oxygen levels below 1.0 mg litre‐1, 100% of the test fish gulped air from the surface. Over a similar temperature range, animals were kept on damp moss for 10 weeks (the drought duration in the drain was 132 days). Under these conditions, test animals lost weight steadily: adults lost 17–24%, and young‐of‐the‐year 30–45%, of their initial weight. On re‐immersion, all adults recovered; however, two young‐of‐the‐year fish died. Within 4 h of re‐immersion, the surviving fish increased their body weight by 6–12%, but within 24 h they returned to their pre‐immersion weight. The mechanisms involved in drought resistance in black mudfish (and their relevance to conservation and habitat preservation) are discussed. A possible option for the restoration, and maintenance, of mudfish in habitats formerly occupied by this species complex is to provide appropriate drought shelters while maintaining a regime of seasonal drought to remove competitors.