Water-level regulation has altered the plant species composition and thus the structure of nearshore aquatic macrophyte communities in two regulated lakes in northern Minnesota as compared with a nearby unregulated lake. Results of previous faunal studies in the regulated lakes were used as a basis for assessing the effects of vegetation changes on faunal communities. The unregulated lake with mean annual water-level fluctuations of 1.6 m supported structurally diverse plant communities and varied faunal habitat at all depths studied. Mean annual fluctuations on one regulated lake were reduced to 1.1 m, and dense beds of four erect aquatic macrophytes dominated the 1.75-m depth that was never dewatered. We suggest that this lack of plant diversity and structural complexity resulted in diminished habitat for invertebrates, reduced availability of invertebrates as food for waterbirds and fish, reduced winter food supplies for muskrats, and reduced feeding efficiency for adult northern pike, yellow perch, and muskellunge. Mean annual fluctuations in the other regulated lake were increased to 2.7 m, and rosette and mat-forming species dominated the 1.25-m depth that was affected by winter drawdowns. We suggest that the lack of larger canopy plants resulted in poor habitat for invertebrates, reduced availability of invertebrates as food for waterbirds and fish, and poor nursery and adult feeding habitat for many species of fish. In addition, the timing and extent of winter drawdowns reduced access to macrophytes as food for muskrats and as spawning habitat for northern pike and yellow perch. In regulated lakes throughout the world, indirect effects on aquatic fauna resulting from alteration of wetland and aquatic macrophyte communities should be considered when water-level management plans are developed.