Intensive agricultural development in the Murray-Darling Basin, Australia, has been achieved at a high cost to the natural environment. This paper assess the hydrological, water quality and ecological changes which have occurred as a result of agricultural land use and particularly, cotton production, in major tributaries of the upper Darling River, using the Namoi Valley, the cradle of the Australian cotton industry, as a case study. Three aspects of cotton production have had detrimental effects in these catchments — extensive vegetation clearing on floodplains and in the riparian zone, water abstraction from regulated and unregulated river flows and intensive chemical use for pest control. The paper outlines the new initiatives in progress to improve the condition of these rivers, including management of pesticide runoff from cotton farms, nutrient reductions in surface waters and restoration of natural patterns of river flow. Constraints on water use off-stream and restrained regional development appear to be inevitable if river health is to be improved.