The Australian lungfish, Neoceratodus forsteri, exists as remnant natural populations in two rivers of south-east Queensland, Australia, and several translocated populations. Lungfish habitats have been impacted by agriculture and forestry, alien plants and fish and by river impoundment and regulation of flows. The species has been listed as vulnerable under Australian Commonwealth legislation. A proposal to construct Traveston Crossing Dam on the free-flowing main channel of the upper Mary River could seriously threaten the lungfish. The dam can be stopped by Commonwealth legislation if important populations of lungfish in the Mary River are likely to be significantly impacted by the new dam. This paper assembles evidence that impoundment of the Mary River and regulation of river flows are likely to decrease and fragment important lungfish populations, disrupt the breeding cycle, reduce juvenile recruitment, and isolate and decrease habitat availability/quality to such an extent that the species is likely to decline. Proposed mitigation strategies include fish transfer facilities, provision of flow releases from the dam (environmental flows) to sustain lungfish habitat and breeding downstream, and translocation of hatchery-reared juvenile lungfish into suitable natural habitats. These mitigation efforts may not be sufficient to secure the genetic diversity and long-term viability of lungfish populations in the Mary River.