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The condition of floodplain wetlands of the Murray-Darling Basin (MDB) reflects the combined effects of climate variability, river regulation, vegetation clearance, and the impacts of human settlement and industry. Today, these systems are degraded, in large part due to changes in the hydroecology of waterways arising from water diversion and abstraction to sustain irrigated agriculture. The MDB Plan directs substantial investment towards the restoration of ecosystems largely via the buy-back of water allocations, under a cap-and-trade system, for use as environmental flows. This region is projected to receive less winter rainfall and run-off, which could exacerbate the impact of water diversions. Long-term climate records suggest a higher level of resilience to drying than may be inferred from modern studies. Further, palaeoecological records of change reveal that many wetlands that are perennial today were once naturally seasonal or intermittent, and that much wetland degradation predates regulation and can be attributed to declines in water quality, rather than quantity. A mix of approaches to rehabilitate this long-degraded system, planned and implemented over an extended period, may meet the demands of the Water Act of 2007, but also support the regional economy. An adaptive management approach offers a framework within which to map system vulnerabilities, characterize climate pressures, identify adaptation options, and monitor outcomes along a pathway to a sustainable future. Early lessons show the extent to which such a deliberative framework can assist water reform under changing socio-economic priorities and external hydroclimatic pressures.