Giffin Lake is a shallow, eutrophic lake in south central Washington and the sub ject of an intensive Phase I restoration diagnostic/feasibility study. Water quality problems in the lake have been manifested principally as excessive growth of the floating-leaved macrophyte,Nymphaea odorata, white water lily. Study results indicate that these macrophytes play a central role in chemical, physical, and biological functioning of the lake. The extensive macrophyte canopy prevents diffusion of oxygen to the sediments by inhibiting both gas exchange with the atmosphere and transfer of wind energy to the water column. Anaerobic conditions develop under the summer macrophyte canopy, as do steep nutrient gradients. Phytoplankton seasonal distribution appears to be strongly influenced by competition with macrophytes for nutrients and light. Zooplankton communities are dominated by rotifers which can tolerate low oxygen conditions and which feed on bacteria and detritus prevalent beneath the macrophytes. Fish population distributions, with the exception of carp, are skewed to older and larger individuals, in constrast to those typically observed in lakes with less macrophyte biomass. Fish condition factors are generally below the average for Washington lakes. Recruitment to gamefish populations appears to be poor due to reproductive failures and low growth rates, resulting from the stresses of high temperatures, low summer oxygen concentrations, and predation from carp. Restoration of Giffin Lake would require removal of the majority of the sediments and macrophytes. Currently, the status of Giffin Lake as a wetland may bring such restoration efforts into conflict with wetland protection programs. The need for a means of assessing wetlands value in the management, protection, and restoration of shallow lakes/wetlands is discussed.