Dairy farm milking operations produce considerable amounts of carbon- and nutrient-rich effluent that can be a vital source of nutrients for pasture and crops. The study aim was to characterise dairy shed effluent from a commercial farm and examine the changes produced by treatment, storage and recycling of the effluent through a two-stage stabilisation pond system. The data and insights from the study are broadly applicable to passive pond systems servicing intensive dairy and other livestock operations. Raw effluent contained mostly poorly biodegradable particulate organic material and organically bound nutrients, as well as a large fraction of fixed solids due to effluent recycling. The anaerobic pond provided effective sedimentation and biological treatment, but hydrolysis of organic material occurred predominantly in the sludge and continually added to effluent soluble COD, nutrients and cations. Sludge digestion also suppressed pH in the pond and increased salt levels through formation of alkalinity. High sludge levels significantly impaired pond treatment performance. In the facultative pond, BOD5 concentrations were halved; however smaller reductions in COD showed the refractory nature of incoming organic material. Reductions in soluble N and P were proportional to reductions in respective particulate forms, suggesting that respective removal mechanisms were not independent. Conditions in the ponds were unlikely to support biological nutrient removal. Recycling caused conservative inert constituents to accumulate within the pond system. Material leaving the system was mostly soluble (86% TS) and inert (65% TS), but salt concentrations remained below thresholds for safe land application.