Fluctuating flows common in hydropeaking operations present biota with contrasting and challenging environments. Taxa that require a narrow range of water velocity or are not adapted to withstand sudden changes in discharge will likely be eliminated or competitively disadvantaged under such circumstances, perhaps leading to reduced biodiversity. I investigated the whole river, longitudinal and lateral patterns of benthic invertebrate abundance, Shannon–Wiener diversity, and rarefied taxa density and richness in the hydropeaking Magpie River and 16 neighbouring natural rivers. The Magpie River had greater abundances of benthic invertebrates than natural rivers, particularly near the dam. General differences in benthic community characteristics were largely based on the near absence of Odonata and Plecoptera and an abundance of snails and worms in the Magpie River. Family density, richness and diversity were greater in the regulated Magpie River and unregulated upper Magpie River than found in natural rivers. Longitudinally, family density, diversity and particularly richness increased downstream in the Magpie River. Laterally, diversity did not show any trends with increasing depth along transects, except at near the dam where it decreased sharply with depth, velocity, and an abundance of filter feeding invertebrates. Taxa density did not show any lateral trends in natural rivers, whereas in the Magpie River, it increased with water velocity and depth. The results of this study are contradictory to the general findings of others implying reduced biodiversity below hydropower facilities. Possible explanations are examined and contrasted with other examinations of benthic invertebrate response below hydropeaking dams. © Her Majesty the Queen in Right of Canada 2012.