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The challenge of restoring watersheds in arid regions often requires the development of novel scientific tools to guide management. The Walker Basin Program was created to reverse ecological decline in an arid, endorheic watershed through scientifically guided restoration. As part of this programme, 3 years of benthic macroinvertebrate samples were collected seasonally at 10 sites that represent the diversity of river environments from the high-mountain headwaters to a desert terminal lake. Samples were analysed to quantify baseline conditions in reference and degraded reaches of river and identify opportunities and constraints for aquatic community restoration. Naturally harsh environments in the lower river characterized by high temperatures and low base flow combined with a weak understanding of reference conditions to limit the utility of commonly used indices for quantifying biotic integrity. A flexible approach was employed using a combination of indicator species analysis, cluster analysis, canonical correspondence analysis, and community tolerance indices to evaluate the variation of benthic macroinvertebrate community composition across a set of environmental gradients. Results demonstrate that benthic communities in the watershed are primarily influenced by a longitudinal gradient related to elevation. A strong secondary community gradient caused by anthropogenic nutrient loading may constrain restoration effectiveness in some parts of the watershed. Restoration activities should improve water quality conditions and initially target areas of the watershed less affected by nutrient loading. Results also demonstrate that benthic communities shift longitudinally. These shifts should be monitored to inform adaptive management of restoration actions. Copyright © 2014 John Wiley & Sons, Ltd. [ABSTRACT FROM AUTHOR]