Understanding the retention time of water in waterbodies during periods of no surface flow in dryland rivers provides an important context for evaluating the ecological importance of a waterhole to the river system. Time series of water level data were collected from 10 waterbodies spread across three river systems of the Lake Eyre Basin (LBE), Australia. Observed loss rates in the absence of surface flow were compared to modelled evaporation rates in order to determine whether open water evaporation was the main loss process from isolated waterholes and to what extent there is evidence of interaction between the surface water and any shallow groundwater aquifers. The modelled evaporation rates were determined using the Penman combination equation and meteorological data from the closest climate station in the region of the waterbodies. The modelled evaporation data were able to explain only some of the variability in the observed loss data but did highlight periods where other processes (including observation error) need to be invoked. These other possible processes, which include temporary groundwater connection and the effect of heat storage on the evaporation losses, probably contribute as much to the observed data variability as error introduced by the use of regional meteorological data. Assuming evaporation is the dominant process determining water loss in the absence of flow, the persistence of a waterhole is primarily dependent upon its depth when flow ceases. The annual loss shown by most waterbodies lies within the range of the modelled evaporation rate using the Penman combination equation and equates between 1.5 and 2.5 m per annum. The use of water level data in conjunction with the modelled evaporation rates was able to provide important insights into controls on waterbody loss rates and persistence. Copyright © 2007 John Wiley & Sons, Ltd.