Dryland river waterholes provide critical habitat and serve as refugia for aquatic animals during droughts, but the quality of these waterholes can often be severely compromised by hypoxic conditions that can lead to mass fish kills and loss of biodiversity. To assist river management, we developed a waterhole-scale ecohydrology model representing thermal stratification and dissolved oxygen regimes during prolonged drought periods in northern Murray-Darling Basin dryland rivers in Queensland, Australia. Model development focused around 6 typical waterholes in these rivers that were shallow (<5 m deep), highly turbid, and stratified with low dissolved oxygen. The model simulations utilised regional climate corrected for local factors such as diurnal vegetation shading and wind sheltering and successfully reproduced the prolonged stratification and hypoxia measured during drought conditions. The simulations highlight the distinct local climate each waterhole experiences due to the combined effects of river morphology and canopy cover that provide various degrees of solar shading and wind sheltering. The model can serve as a tool to inform water management decisions and climate adaptation strategies. Example scenarios demonstrate that (1) even where the canopy shading effect was small (5% at one site), further loss of riparian vegetation could increase temperature by 2–4 °C in warmer months with prolonged stratification; and (2) under an example RCP 8.5 climate change scenario, water temperature is likely to increase 2–10 °C, and oxygen saturation will decrease by 10% to 20% in the middle layers for most of the no-flow period by 2080–2099.