Species composition and biomass of phytoplankton assemblages of a heavily impacted lake (Lake Illawarra) and a less impacted lake (Burrill Lake) in the South-Eastern region of Australia were compared based on bimonthly samples from three sites in each lake collected between April 2005 and April 2007. Lake Illawarra was generally characterized by higher nutrient concentrations and lower salinity than Burrill Lake. Phytoplankton assemblages displayed significant differences between the two lakes in terms of the dominant species composition and patterns of seasonal change rather than biomass. Diatoms were the dominant species in Lake Illawarra on most sampling occasions. In contrast, dinoflagellates (including toxic species) dominated in Burrill Lake during most seasons. Seasonal succession of phytoplankton in the two lakes did not follow the strict spring maximum that is generally observed in temperate waters. In Burrill Lake, maximum phytoplankton biomass often occurred in winter, while the maximum biomasses in Lake Illawarra occurred in autumn, winter and spring. The significant difference of nutrient structure between two lakes and warm temperate regime was regarded as important factors to affect these results. The results suggested care should be taken when relying on estuary health "indicators", such as chlorophyll a, rather than more detailed investigations of phytoplankton species compositions.