The turbidity of lakes is generally considered to be a smooth function of their nutrient status. However, recent results suggest that over a range of nutrient concentrations, shallow lakes can have two alternative equilibria: a clear state dominated by aquatic vegetation, and a turbid state characterized by high algal biomass. This bi-stability has important implications for the possibilities of restoring eutrophied shallow lakes. Nutrient reduction alone may have little impact on water clarity, but an ecosystem disturbance like foodweb manipulation can bring the lake back to a stable clear state. We discuss the reasons why alternative equilibria are theoretically expected in shallow lakes, review evidence from the field and evaluate recent applications of this insight in lake management.