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1. Hydropower is often presented as a clean and renewable energy source that is environmentally preferable to fossil fuels or nuclear power. Hydropower production, however, fundamentally transforms rivers and their ecosystems by fragmenting channels and altering river flows. These changes reduce flow velocity and the number of rapids, and reduce or alter wetland, floodplain and delta ecosystems. Dams disrupt dispersal of riverine organisms and sediment dynamics and may alter riverine biodiversity composition and abundance. Freshwater ecosystems now belong among the world’s most threatened ecosystems. 2. Water managers are beginning to recognise the need to combine demands for social and economic development with the protection of the resource base on which socio-economic benefits rely. Environmental flows can help to balance ecosystem and human needs for water, both when constructing new dams and in re-licensing existing dams. 3. We briefly review the impacts of hydropower generation on freshwater ecosystems by discussing different types of dams and development, and by providing examples from Sweden of how environmental effects of hydropower production could be mitigated. Special emphasis is given to flow regulation through re-operation of dams. 4. Regulated rivers in Sweden were developed with little consideration of ecological effects, with most dams lacking migration pathways or minimum flow releases. There is thus a substantial potential for improvement of ecological conditions, such as naturalisation of flow regimes and reestablishment of connectivity, in regulated river reaches but technical hurdles imply major challenges for rehabilitation and mitigation. Most regulated rivers consist of cascades of consecutive reservoirs and impoundments, further constraining possible actions to improve ecological conditions. 5. Most environmental mitigation measures require flow modifications to serve ecosystems, implying reduced power production. An important challenge for river management is to identify situations where measures involving relatively small production losses can have major ecological advantages. 6. Climate change during the 21st century is expected to increase runoff in northern and central Sweden and make the annual hydrograph more similar to variation in electricity demand, i.e. a lower spring flood and increased run-off during winter months. This could provide opportunities for operating dams and power stations to the benefit of riverine ecosystems. On the other hand, demands to produce hydropower are likely to increase as fossil fuels are phased out, leading to increased pressures on free-flowing rivers and aquatic ecosystems. [ABSTRACT FROM AUTHOR]