Large freshwater lakes in Australia’s arid zone are episodic due to highly variable inflows from allogenic rivers. A few receive enough inflow almost yearly to be permanent, despite large losses from high evaporation. Biodiversity is high, with most taxonomic groups represented, and is largely endemic at the continental scale. There is almost no regional endemism, which is at variance with other major aquatic habitat types in Australia. Abundance fluctuates greatly, with invertebrates and fish booming and busting with floodwater input, but birds generally reach greatest numbers later in the cycle as they gather on the more persistent waters. Invertebrate assemblages are influenced by the degree of lake permanence, turbidity and salinity, providing a temporally variable mosiac of environments throughout a lake system and between systems and with time. Unlike other groups, fish are not speciose, but are important predators in most systems with breeding coinciding with flooding. This favours native species against exotics in the Coongie Lakes but, in the Paroo, exotics are common in permanent waters. Waterbirds are the very obvious components in these variable systems, using their resources for feeding and breeding. Most are extremely nomadic to take advantage of the variable habitat. Two of the most important lake systems, the Coongie Lakes on Cooper Creek and the Paroo lakes in the northwestern Murray Darling catchment, are threatened by water abstraction upstream for irrigation, so that important habitat may be lost. In addition, the lakes will become less variable and, so, possibly compromise their character with cascading effects through the ecosystem. Some smaller lakes are adversely impacted by accelerated sedimentation.