Mount Isa Water Board's Clear Water Lagoon is the only documented natural ftltration facility for potable water in Australia. This study evaluates the functionality and efficacy of the Clear Water Lagoon to filter catchment runoff. Its use since 1982 demonstrates the effectiveness and potential extension of this technology to other remote areas where more traditional water treatment facilities are less feasible. Sediment and water analyses show that the reed bed system significantly improves influent water quality parameters such as heavy metal concentrations, turbidity and colour to within Australian Drinking Water Guidelines (2004). The dense network of macrophytes, principally Hydrilla verticillate, in the settling pond appear to be the primary agent responsible for the removal of nutrients, heavy metals and suspended sediment from incoming flows.