Physico‐chemical conditions and macroinvertebrate faunas of 20 South Island lake outlets were investigated in summer‐early autumn of 1990–94. Four outlet types were recognised: unregulated alpine, unregulated mid/low elevation, regulated hypolimnetic and regulated epilimnetic outlets. Alpine outlet waters had significantly lower (P <0.05) alkalinities and conductivities (6–12mg l‐1CaCO3and 13–45 μS cm‐1) than all other outlets (11–36mg l‐1CaCO3and 36–93 μS cm‐1), whereas pH values were similar among outlet types. Substrate size was significantly greater in modified epilimnetic than natural mid/low elevation outlets (P <0.01). Total number of taxa and invertebrate densities were significantly lower in alpine and hypolimnetic outlets than natural mid/low elevation outlets (P< 0.05, andP <0.01 respectively), and distinct differences were observed in the relative abundances of major taxonomic groups. Alpine streams were dominated by the mayfliesDeleatidium(Leptophlebiidae), andNesameletus(Siphlonuridae), the gripopterygid stoneflyZelandoperla decorataand predatory hydrobiosid caddisflies; molluscs were absent, and filter‐feeding hydropsychid caddisflies rare. In contrast, the hypolimnetic outlets were dominated by filter‐feeding hydropsychids (87–93% of the fauna), and no stoneflies were found. Epilimnetic and unregulated mid/low elevation outlets had similar communities, however invertebrate densities were significantly lower in regulated surface release outlets. Altitude, outlet width, velocity, conductivity, and percentage of the catchment in forest, were all implicated as factors explaining differences in community composition.