The Neversink River and the Beaver Kill in southeastern New York are major tributaries to the Delaware River, the longest undammed river east of the Mississippi. While the Beaver Kill is free flowing for its entire length, the Neversink River is subdivided by the Neversink Reservoir, which likely affects the diversity of local fish assemblages and health of aquatic ecosystems. The reservoir is an important part of the New York City waster-supply system that provides drinking water to more than 9 million people. Fish population and community data from recent quantitative surveys at comparable sites in both basins were assessed to characterize the differences between free-flowing and impounded rivers and the extent of reservoir effects to improve our capacity to define ecosystems responses that two modified flow-release programs (implemented in 2007 and 2011) should produce in the Neversink River. In general, the continuum of changes in fish assemblages which normally occur between headwaters and mouth was relatively uninterrupted in the Beaver Kill, but disrupted by the mid-basin impoundment in the Neversink River. Fish assemblages were also adversely affected at several acidified sites in the upper Neversink River, but not at most sites assessed herein. The reservoir clearly excluded diadromous species from the upper sub-basin, but it also substantially reduced community richness, diversity, and biomass at several mid-basin sites immediately downstream from the impoundment. There results will aid future attempts to determine if fish assemblages respond to more natural, yet highly regulated, flow regimes in the Neversink River. More important, knowledge gained from this study can help optimize use of valuable water resources while promoting species of special concern, such as American eel (Anguilla rostrata) and conserving biodiversity in Catskill Mountain streams.