The Diatom Index for Australian Rivers (DIAR), originally developed at the genus level, was reformulated at the species level with data from diatom sampling of rivers in the Australian Capital Territory, New South Wales, Queensland, South Australia and Victoria. The resulting Diatom Species Index for Australian Rivers (DSIAR) was significantly correlated with the ARC_E (Assessment of River Condition, Environment) index developed in the Australian National Land and Water Resources Audit (NLWRA), and with nine of the ARC_E’s constituent indices and sub-indices, across 395 river reaches in south-eastern Australia. These correlations were generally stronger than those shown by the biological index that was used to assess river condition in the NLWRA, the ARC_B (Assessment of River Condition, Biota) index based on macroinvertebrates and the Australian River Assessment System (AUSRIVAS). At a finer spatial scale, DSIAR was strongly and significantly correlated with measures of catchment urbanisation for streams in the eastern suburbs of Melbourne, Victoria. DSIAR scores across south-eastern Australia bore little relationship to the latitude, longitude or altitude of sampling sites, suggesting that DSIAR is not greatly affected by macro-geographical position. In addition, DSIAR scores did not vary greatly among small-scale hydraulic environments within a site. DSIAR appears to have potential as a broad-scale indicator of human influences on Australian rivers, especially the effects of agricultural and urban land use, and also for impact studies at a local scale. Further evaluation is warranted to test the sensitivity of the index to natural variables such as catchment geology, and to assess its performance in northern, western and inland Australia.