Nutrients, periphyton and macroinvertebrates were sampled every two months for one year to assess the effects of treated sewage effluent on the Thredbo River and to compare changes in chemical concentrations and the invertebrate community since the introduction of nutrient removal on the Thredbo sewage treatment plant. Chemically, the impact of the effluent was minor and was reduced from levels measured before the addition of nutrient removal to the Thredbo sewage treatment plant. However, the reduction may be the result of higher flows during the study period. Biologically there was no indication of nutrient enrichment during June, August and October, with differences occurring between physically dissimilar sites irrespective of position relative to the sewage effluent inflow. Large increases in periphyton and macroinvertebrates occurred in December, February and April at both open sites and those downstream of the sewage outflow. Previous studies found increases in invertebrate abundance and richness immediately downstream of the sewage inflow, but the impact was greater and extended further downstream than found in this study. Strong correlations between total phosphorus and periphyton biomass and chlorophyll-a indicate phosphorus was a limiting nutrient. Higher periphyton biomass and chlorophyll-a at all sites during the warmer months (especially at open sites with an even cobble substratum), throughout the year, indicates light, temperature and substratum type were as important as phosphorus in controlling algal growth. Low algal biomass during the high flow month of October also indicates the importance of water velocity in controlling periphyton biomass. The structure of the macroinvertebrate community was noticeably different at sites downstream of the effluent discharge, with the exception of the most downstream site, when compared to the upstream sites. The occurrence of high macroinvertebrate numbers and species richness at sites with high periphyton growth and the strong positive correlation between invertebrate grazers and periphyton measurements shows a dependent relationship between invertebrates and periphyton growth. Therefore, the physical factors of light, temperature and substratum characteristics of particular sites in the Thredbo River, may be as important in controlling the benthic community as the levels of nutrient inputs from sewage.