Wetland water level fluctuations often influence benthic macroinvertebrate communities through changes in water quality, substrate, and macrophytes and, hence, affect the structure and function of aquatic ecosystems. However, there is lack of understanding on how water level fluctuations affect the structure and composition of benthic macroinvertebrates in subtropical shallow wetlands in Nepal. Here, we assessed the changes in benthic macroinvertebrate community composition in response to water level fluctuations and identified indicator taxa sensitive to such fluctuations. A study was conducted over 4 seasons covering one annual cycle of water level fluctuation in 4 wetlands of Koshi Tappu Wildlife Reserve, Nepal. The study revealed that benthic macroinvertebrate composition significantly differed across water levels. Dissimilarities in macroinvertebrate community composition were mainly attributed by families Atyidae, Dytiscidae, Baetidae, Planorbidae, Chironomidae, Bithyniidae, Sphaeriidae, and Thiaridae. Taxon specific richness, densities, and biomass varied across the water levels while no difference was documented for overall family richness, density, and biomass. Ephemeroptera and Trichoptera richness decreasedwhen water levels were low while Coleoptera and Diptera richness increased. Medium water level supported high benthic macroinvertebrate diversity. Indicator taxa analysis identified Coleoptera: Hydrophilidae and Dytiscidae, Hemiptera: Pleidae, Diptera: Muscidae and Mollusca: Sphaeriidae, Viviparidae, and Thiaridae, as indicators of low water level. Similarly, Coleoptera: Scirtidae, Hemiptera: Micronectidae and Oligochaeta: Tubificidae as indicators of medium water level, and Trichoptera: Polycentropodidae and Ephemeroptera: Caenidae as indicators of high water level. Redundancy analysis identified water level as one of the most influencing factors in benthic macroinvertebrate community variation. Considering the significant response of benthic macroinvertebrates to water level fluctuations, theyare important as ecological indicators in research aimed at developing environmental flow frameworks. Indicator speciesare likely to be a vital tool in environmental impact assessment and monitoring in relation to hydrological development. The outcomesof this research have important implications to conservation and management of wetlands to preserve the valuable ecosystem functions provided by wetlands.