Abstract Species richness in relation to area of habitat is extremely high in many freshwater groups, with an estimated 12 000 fish, 5000 amphibians and 2000 mollusc species dependent on freshwater habitats. Other major groups dependent upon fresh waters include, reptiles, insects, plants and mammals. The IUCN Redlist and The Nature Conservancy assessments both indicate the serious vulnerability and degradation of inland water habitats world-wide. It is evident that there are neither the resources nor the time to protect all areas where species are under threat. Clearly a method is needed for prioritising inland water sites for conservation at both local and regional scales. IUCN held a workshop in June 2002 to develop a method for prioritising important inland water sites for biodiversity conservation. The goal of the workshop was to develop a method which would help to focus on conservation efforts and funds at the regional scale and would serve as a tool for active conservation efforts at the local scale. The method was developed on the foundations of a review of the existing site prioritisation schemes for terrestrial, marine and freshwater ecosystems. Expert representatives for a broad range of priority taxa and for existing schemes provided input to the development of the site prioritisation method. This paper describes the development of the method, the selection criteria adopted, guidelines for their use and the site selection procedure.