Recently, Australian interest in farm dams has focused on rates of harvest of surface waters (runoff), and the impact this has on nearby natural systems. Little research has been directed towards the role of these artificial water bodies in sustaining biological reserves within the wider ecosystem. Macroinvertebrate communities in three farm dams in the Central Tablelands of New South Wales were surveyed, and water quality variables were correlated with species richness and abundance. Community responses to habitat factors including sediment depth, stock use, vegetation and debris were also examined. Communities were described at several taxonomic levels in addition to allocation to trophic groups and primary functional feeding groups. Species richness and abundance of communities were found to vary between dams and between habitat types within dams. The extent of these differences was decreased when communities were described by either trophic status or functional feeding mechanisms. Habitats were influenced by water quality and by physical features of the habitat, with the two factors interacting to define equilibrium conditions. Localised conditions resulted in different macroinvertebrate communities. Physicochemical parameters that correlated most closely with communities included light penetration, chlorophyll-a and conductivity. Habitat factors that were most frequently linked with communities were sediment depth and canopy cover, with localised disturbances related to stock use affecting feeding groups rather than specific taxa. One of the major problems associated with increasing modification of landscapes by agriculture or urbanisation is the fragmentation of undisturbed habitats. Creation of joint aquatic and woodland habitats enhances biodiversity corridors. The recognition of the potential for farm dams as reservoirs of biodiversity and development of management practices that optimise this neglected biodiversity reserve may have much wider benefits biologically, aesthetically and productively.