Historical legacies of land-use change together with growing demands for water resources from agricultural, industrial and urban sectors have extensively degraded many of the freshwater ecosystems of Australia. Recent and rapid declines in the condition of these ecosystems indicate that current patterns of water consumption are ecologically unsustainable, particularly in agricultural landscapes. We use three scenarios of water resource use and development over the next 50 years to examine the implications of each in terms of their likely impact on freshwater ecosystems. These scenarios encompass agricultural, industrial and urban water use, and propose trends in water use and management rather than a specific set of predictions. We see two of these scenarios, those of business-as-usual and economic growth, as being ecologically unsustainable, leading to significant declines in the biodiversity and functioning of freshwater ecosystems. Only under our ecological-sustainability scenario do we foresee possible large-scale improvements in the condition of Australia's aquatic ecosystems. This scenario will require major shifts in water use patterns and require careful planning and consideration of a range of social and economic issues. In all scenarios large-scale ecosystem drivers, such as climate change and salinity, will become major impediments to improvements in the ecological condition of aquatic ecosystems.