[Truncated abstract] The process of selective withdrawal has, over many years, been used as an effective tool for extraction of water of particular quality from stratifed reservoirs. While the formation and steady-state theory of selective withdrawal in a stratifed fluid at rest has been extensively studied, little is known how vertical displacements of stratifcation due to long internal waves affect the water quality of the outflows. The first part of this study investigates the effect of basin-scale internal waves on the water quality parameters in Lake Burragorang, a large water supply reservoir for the city of Sydney, Australia. It is shown from field observations how the steady-state formulation of selective withdrawal can be used to predict the outflow water quality in reservoirs where internal waves are present, with a temperature prediction accuracy within 0.2 oC. . . In order to explain fluctuations in water quality parameters of the outflows, such as turbidity, it is important to know not only the stratifcation conditions in front to the offtake, but also to understand the dynamics of suspended particles in the upper reaches of the reservoir. In the third part of this study, transport and settling of suspended particles was investigated in the Wollondilly arm of Lake Burragorang by combination of direct and inverse methods. The inverse method was modifed to enable the separation of advective and diffusive transport of suspended particles from Stokes settling controlled by gravity, yielding twodimensional fields of particle velocities and settling fluxes in the upper reaches of the reservoir. These estimates are compared to the direct measurements of sedimentation fluxes made by the sediment traps and LISST-100.