The surface- and ground-water resources of the Punaluu area of northeast Oahu, Hawaii, have been and continue to be important for cultural, domestic, agricultural, recreational, and aesthetic purposes. Punaluu Stream flows perennially because rain falls frequently in the area and ground water discharges to the stream. Flow in Punaluu Stream is reduced by the direct diversion of water for off-stream uses and possibly from the withdrawal of ground water near the stream. Punaluu Ditch diverts water from Punaluu Stream near an altitude of 210 feet. During the recent period 1995-2004, discharge in Punaluu Stream that was equaled or exceeded 50 percent of the time (median or Q50 discharge) and discharge that was equaled or exceeded 95 percent of the time (Q95 discharge) measured immediately upstream from the Punaluu Ditch diversion intake, respectively, were 18 and 13 cubic feet per second, whereas the Q50 and Q95 discharges measured immediately downstream from the diversion intake, respectively, were 7.0 and 1.3 cubic feet per second. Thus, near an altitude of 210 feet, diversion of surface water by the Punaluu Ditch caused the Q50 discharge in Punaluu Stream to be reduced to 39 percent of the natural Q50 discharge, and the Q95 discharge was reduced to 10 percent of the natural value. The relative effects of the Punaluu Ditch diversion on flow in Punaluu Stream decreased in a downstream direction, mainly because of the compensating effects of tributary inflows and ditch return flows. At an altitude of 10 feet, the Q50 discharge in Punaluu Stream was 82 percent of the natural Q50 discharge, and the Q95 discharge was 69 percent of the natural value. Changes in streamflow affect the quantity and quality of physical habitat used by native stream fauna. The Physical Habitat Simulation System (PHABSIM) approach was used to evaluate the effects of different diversion scenarios on physical habitat for selected native species in Punaluu Stream. Habitat-suitability criteria developed for streams in northeast Maui, Hawaii, were used to determine the effects of incremental changes in streamflow on physical habitat, in terms of weighted usable area (WUA) in Punaluu Stream. The effects of different diversion conditions on WUA for Neritina granosa and Awaous guamensis were evaluated by determining the average number of days per year for which WUA values are less than a specified reference value (during periods when discharge is less than or equal to the median natural discharge). For recent diverted conditions (1995-2004), the average number of days per year that WUA values are less than 50 or 75 percent of the WUA value at median natural discharge generally (1) decreases in a downstream direction, reflecting the effects of tributary inflows and ditch return flows, (2) is less than the corresponding number of days for constant diversion rates greater than about 4-5 cubic feet per second at a stream altitude of 10 feet, and (3) is greater than the corresponding number of days for a constant diversion rate of 10 cubic feet per second at stream altitudes of 40, 100, and 140 feet. The number of days that WUA values are less than 75 percent of the WUA value at median natural discharge generally increases substantially for constant diversion rates exceeding about 4-5 cubic feet per second. At stream altitudes of 10, 40, 100, and 200 feet and for constant diversion rates of up to 4 cubic feet per second, WUA values are less than 75 percent of the WUA value at median natural discharge for fewer than 13 days per year. At stream altitudes above 40 feet and for a constant diversion rate of 10 cubic feet per second, WUA values are less than 75 percent of the WUA value at median natural discharge for 131 to 183 days per year. Stream temperature is a factor that potentially could affect the abundance and distribution of native aquatic species. Measured stream temperatures immediately upstream and downstream from the diversion intake did not indicat