Ecological and statistical models were developed using freshwater algal assemblages to assess water quality and ecological health of a regulated river. These models were used to inform configuration of flows to maintain or improve environmental conditions of the waterway whilst meeting consumptive water supply commitments. The flow regime of the MacKenzie River, western Victoria, Australia, has been substantially modified since the construction of a water supply reservoir on its upper reach in 1887. Water is withdrawn at several locations downstream of the reservoir, creating a substantially modified flow regime, impacting key environmental values of the river. To assess the impact of the different flow regimes on river health and ecosystem function, ten sites were repeatedly sampled along the river between February 2012 and April 2014. Physical and chemical characteristics of water, including pH, temperature, turbidity, electrical conductivity, dissolved oxygen, total nitrogen, total phosphorous, cations, and anions, were measured. Biological properties of the algal periphyton communities, including dry mass, ash-free dry mass, chlorophyll-a concentration, and species composition, were also measured. Exploration of the algal assemblage and water chemistry data using the computationally unconstrained ordination technique such as principal component analysis principal component analysis (PCA), correspondence analysis (CA), detrended correspondence analysis (DCA), and canonical correspondence analysis (CCA) indicated two strong gradients in the data sets. Furthermore, the quantitative ecosystem response models have been developed as the prototype tool to assist in the future configuration of flows in this river. The empirical data and models showed the lower reaches of the river to be in poor condition under low flows, but this condition improved under flows of 35 ML/day, as indicated by the reduction in green algae and cyanobacteria and improvement. Finally, the results are presented to tailor discharge and duration of water volume by amalgamation of consumptive and environmental flows to improve the condition of the stream thereby supplementing the flows dedicated to environmental outcomes.