Methodologies for recommending instream flows for protecting lotic ecosystems are evolving amid constructive criticism. During this period of change it is important that all concerned parties are aware of the ecological factors that control stream ecosystems and fish populations. Ecological factors relating to stream ecology, population dynamics, energetics, predation, and competition are reviewed to explain why indices of microhabitat availability are not expected to be consistent predictors of fish population density. Implications of these concepts for development and application of instream flow-habitat models for recommending instream flow regimes are discussed. Current ecological theory and empirical studies support the hypothesis that microhabitat availability may limit fish populations but not continuously. Therefore, assessments must consider the limiting habitat events as well as temperature and water quality constraints. Also, invertebrates and non-game fishes must be considered in instream flow assessments because of their importance in stream ecosystems.