Fish are commonly stocked into impoundments globally, yet their patterns of habitat use in this variable environment are rarely incorporated into the management of stocking density. The movement and distribution of Australian bass Macquaria novemaculata (Perchichthyidae) were monitored in two impoundments to assess whether: (1) impoundment populations exhibit behaviour typical of wild or riverine percichthyids; (2) changing gradients of temperature and dissolved oxygen influenced distribution; and (3) the volume of available habitat should be incorporated into the management of these fisheries. Habitat use was determined with a combination of gill netting and ultrasonic telemetry using depth-coded tags. Tagged fish displayed both crepuscular and migratory behaviour typical of the Percichthyidae, but also showed a previously unobserved division between littoral and pelagic foraging strategies. Australian bass showed no obvious thermal preferences, but avoided areas with dissolved oxygen <4 mg L–1. In one impoundment, a combination of hypoxia and water extraction reduced the volume of available habitat to 15% of maximum in March 2009, which coincided with increased catch per unit effort (CPUE) and decreased fish condition. The adaptive behaviour of Australian bass makes them well suited to the variability of impoundments, but annual and stochastic events of habitat reduction should be considered when planning stocking regimes for these fisheries.