Summary With limited evidence linking Australia's Murray-Darling Basin fish species and flooding, this study assessed annual variation in abundance and recruitment levels of a small-bodied, threatened floodplain species, the Southern Pygmy Perch (Nannoperca australis), in floodplain habitats (creeks, lakes and wetlands) in the Barmah-Millewa Forest, Murray River, Australia. Spring and summer sampling over a 5-year period encompassed large hydrological variation, including 1 year of extended floodplain inundation which was largely driven by an environmental water release, and 2 years of severe regional drought. Recruitment and dispersal of Southern Pygmy Perch significantly increased during the floodplain inundation event compared with the other examined years. This study provides valuable support for an environmental water allocation benefiting a native species, and explores the link between flooding and its advantages to native fish. This suggests that the reduced flooding frequency and magnitude as a result of river regulation may well be a major contributing factor in the species’ decline in the Murray-Darling Basin.