AbstractPursuant to the Northwest Power Planning Council's Fish and Wildlife Program for the Columbia River system, we estimated losses in fish populations and developed mitigation, compensation, and protection alternatives for reservoirs and downstream river reaches affected by hydropower development in the Flathead and Kootenai River systems in northwest Montana, U.S.A. The construction of Hungry Horse Dam has resulted in estimated annual losses of 65500 migratory juvenile westslope cutthroat and 1965 adult migratory bull trout from the Flathead Lake and River system. In addition, operations of Hungry Horse and Kerr dams caused annual losses conservatively estimated at 96300 river‐spawning and 131000 lakeshore‐spawning kokanee adults. Water level fluctuations caused by dam operations at Libby and Hungry Horse reservoirs result in: (1) altered thermal stratification, (2) indirect losses in phytoplankton and zooplankton production, (3) direct washout of phytoplankton and zooplankton through dam penstocks, (4) reductions in standing crop of benthic organisms and of insects on the water surface, and (5) reduced fish growth in the late summer and fall. Mitigative measures include: (1) 99.2 and 113.3 m3s−1minimum flows in the Flathead and Kootenai rivers respectively, to protect salmonid eggs and juveniles, (2) improvement of fish passage to restore migrations between the Flathead and Swan systems, and (3) biological rule curves for operations at Libby and Hungry Horse reservoirs. To compensate for fisheries losses, we recommend enhancement of spawning and rearing habitat, introductions of hatchery juveniles, and spawning channels. We recommend protection from further hydropower development for 100 stream reaches (1386 km) for fish species of special concern, and for outstanding sport fisheries. These and other measures will be considered by various agencies in developing an overall fisheries restoration plan which should be flexible, and employ principles of adaptive management. Effectiveness of the plan may be limited by heavy reliance on hatchery fish. Although mitigation efforts may not restore fish populations to pre‐dam levels, substantial benefits should be r