Rivers of Western Queensland, Australia, represent a discontinuous and variable aquatic habitat for the freshwater fauna of the region. Rivers periodically fluctuate between being highly fragmented, with numerous disconnected waterholes and ephemeral channels, and being highly connected by a dominant system of anastomosing channels. We used mitochondrial sequences to investigate the genetic structure and inferred patterns of dispersal associated with this flow regime for the freshwater prawn, Macrobrachium australiense (Decapoda: Palaemonidae), sampling 28 localities throughout eight catchments. Based on a 505 base pair fragment of mitochondrial cytochrome c oxidase subunit I, we identified 98 haplotypes in a sample of 402 individuals. The haplotypes clustered into two main clades corresponding geographically to the major drainages: the Lake Eyre and Murray-Darling basins. Populations of M. australiense inhabiting the two basins appear to have diverged around 800 000 years ago (estimated sequence divergence of 1.6%). Analysis of population differentiation indicated contemporary high levels of genetic subdivision and restricted gene flow among populations within and among catchments. Phylogenetic analysis detected a series of historical range expansions in the region and we suggest that climate fluctuations during the Pleistocene have resulted in extensive floods that have promoted historical movements of aquatic organisms across catchment boundaries.