Freshwater biodiversity is the over-riding conservation priority during the International Decade for Action - 'Water for Life' - 2005 to 2015. Fresh water makes up only 0.01% of the World's water and approximately 0.8% of the Earth's surface, yet this tiny fraction of global water supports at least 100000 species out of approximately 1.8 million - almost 6% of all described species. Inland waters and freshwater biodiversity constitute a valuable natural resource, in economic, cultural, aesthetic, scientific and educational terms. Their conservation and management are critical to the interests of all humans, nations and governments. Yet this precious heritage is in crisis. Fresh waters are experiencing declines in biodiversity far greater than those in the most affected terrestrial ecosystems, and if trends in human demands for water remain unaltered and species losses continue at current rates, the opportunity to conserve much of the remaining biodiversity in fresh water will vanish before the 'Water for Life' decade ends in 2015. Why is this so, and what is being done about it? This article explores the special features of freshwater habitats and the biodiversity they support that makes them especially vulnerable to human activities. We document threats to global freshwater biodiversity under five headings: overexploitation; water pollution; flow modification; destruction or degradation of habitat; and invasion by exotic species. Their combined and interacting influences have resulted in population declines and range reduction of freshwater biodiversity worldwide. Conservation of biodiversity is complicated by the landscape position of rivers and wetlands as 'receivers' of land-use effluents, and the problems posed by endemism and thus non-substitutability. In addition, in many parts of the world, fresh water is subject to severe competition among multiple human stakeholders. Protection of freshwater biodiversity is perhaps the ultimate conservation challenge because it is influenced by the upstream drainage network, the surrounding land, the riparian zone, and - in the case of migrating aquatic fauna - downstream reaches. Such prerequisites are hardly ever met. Immediate action is needed where opportunities exist to set aside intact lake and river ecosystems within large protected areas. For most of the global land surface, trade-offs between conservation of freshwater biodiversity and human use of ecosystem goods and services are necessary. We advocate continuing attempts to check species loss but, in many situations, urge adoption of a compromise position of management for biodiversity conservation, ecosystem functioning and resilience, and human livelihoods in order to provide a viable long-term basis for freshwater conservation. Recognition of this need will require adoption of a new paradigm for biodiversity protection and freshwater ecosystem management - one that has been appropriately termed 'reconciliation ecology'.