AbstractThe headwater section of the Thomson River has been nominated for listing as a heritage river, mainly because it supports a population of large blackfish, a species which has high conservation value in Victoria. The upper river was dammed in 1983, creating an impoundment of 1.2 × 106Ml capacity. It is anticipated that the dam will provide a reliable water supply to Melbourne for up to 20 years, but minimization of downstream releases will delay augmentation. For the period during which the dam was filling, an interim environmental flow was applied. However, these flows were lower than what was considered at the time to be ideal for maintaining in‐stream habitat in the long term. Despite profound modification of the river's hydrology, there is no evidence for serious environmental impacts. Macroinvertebrate populations have recovered from disturbance during the construction phase, and the diversity of fish has not changed. However, there is concern that a lack of floods will result in contraction of the channel. This would probably mean a loss of available habitat area in the long term. Abstraction of water from the lowland section of the Thomson River began in 1957. Unfavourably low flows have occurred since regulation, but wetland inundation floods still occur with the same frequency. Although current management practices do allow unfavourable flow conditions to occur occasionally, the regulated flow regime has not reduced the diversity of native fish present in the lower river. This is heartening, but given the likelihood of future increases in the demand for water, long‐term protection of in‐stream fauna requires the application of an appropriate environmental flow regime. Habitat area–discharge curves derived from fish hydraulic preference data were used as the basis for devising a minimum flow recommendation. Five different methods of specifying monthly flow regimes are compared. A method is presented that uses hydraulic geometry relations from a neighbouring, hydrologically similar catchment to specify the magnitude and duration of an artificial annual channel maintenance flood. Implementation of the suggested environmental flow regime will probably result in a flow deficit in the lower Thomson River if current irrigation demands are to be met. To offset the deficit, additional water can be released from the dam. The flow required will not reduce the amount of habitat available in the upper Thomson River below the dam, but this strategy will bring forward the date of augm