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Dragonflies have been proposed as indicators for the ecosystem health of freshwater wetlands. For their useful functioning as indicators it is, however, necessary to identify species compositions in specific habitats and species-habitat associations, particularly in the tropics, where such knowledge is still weak. We examined the dragonfly species composition of 133 localities in the arid environment of western Namibia. An analysis of nestedness indicated that distinct, and predictable patterns of species associations can be expected. Discriminant analyses revealed that most of the nine habitat types separated by structural and hydrological parameters are well discriminated by their dragonfly assemblages. Spring brooks in particular host a specific assemblage, which is threatened due to the habitat restriction of several species, as well as by recent habitat loss and degradation. Using a hierarchical method of several criteria we demonstrated the selection of a set of potential indicator species from the species set, most of these being useful indicators for spring brook assemblages. The conservation status of certain habitats and species is discussed. We propose that dragonflies will have a high indicator potential for threatened freshwater wetlands in such areas and may also serve as an indication of the sustainable use of water resources including evaluating measures to rehabilitate environments. [ABSTRACT FROM AUTHOR]