Sustaining ecosystem services important to humans while providing a dependable water supply for agriculture and urban needs is a major challenge faced by managers of human-dominated watersheds. Modification of natural flow regimes alters the abundance and composition of native plant and animal communities, affecting ecosystem services such as water storage and nutrient cycling that depend on particular species or functional groups. Because complete restoration of natural hydrology is generally not an option in human-dominated watersheds, there is a need to determine which specific flow manipulations are necessary to restore species-dependent ecosystem services in particular systems. Here we propose a framework for predicting ecological consequences of flow manipulations that is based on the role of hydrology in linking population, community, and ecosystem processes. We use a case-study approach to examine how interactions among the flow regime and species' functional traits help organize local biotic communities and generate alternate states of ecosystem functioning. Results indicate the importance of integrating hydrology and biology to predict ecological consequences of flow regime manipulations and the need to apply general flow-restoration principles on a case-by-case basis.