Groundwater is important for wetland, stream and floodplain habitats throughout the world. In times of drought groundwater could be particularly important in freshwater habitats by decoupling them from declines in precipitation and stream flow, but this has rarely been investigated. Additionally, there may be threshold relationships between groundwater and ecological responses that could indicate when certain ecological communities may become more at risk from drought. We tested the importance of groundwater when assessing drought responses in both macroinvertebrates and floodplain forests in catchments of the southern Murray-Darling basin (MDB) and also examined whether there was a threshold response of tree condition along groundwater depth gradients in the Condamine catchment (northern MDB). In the Campaspe catchment, forest condition (EVI) over drought periods declined more in areas of high salinity groundwater (µS/cm>2500) relative to areas of low groundwater salinity. In the Condamine catchment, where groundwater salinity is low, groundwater depth was an important determinant of tree condition, with tree condition declining sharply at depths of 12-20m. Groundwater was also important for macroinvertebrates, with communities in areas of ‘high groundwater influence’ (based on hydrogeological proxies) undergoing less change in periods of low flow compared to sites of 'low groundwater influence'. The studies highlight the importance of groundwater for both in-stream and terrestrial floodplain ecosystems and indicate that changes in groundwater depth and / or quality may have important implications for understanding ecological responses to drought, as well as for the maintenance of drought refuge.