Although most streams show a downstream increase in channel size corresponding to a downstream increase in flood discharges, those flowing off the Illawarra escarpment of New South Wales show a marked reduction of channel size, accompanied by a down-stream increase in flood frequency in their lower reaches. Within the confined and steeply sloping valleys of the escarpment foothills, bed and bank sediments are relatively coarse and uncohesive, and channels increase in size, corresponding to increasing discharge downstream. However, once these streams emerge into more open rural valleys at lower slopes and are accompanied by extensive floodplains formed of fine cohesive sediment, there is a dramatic reduction in channel size. This decrease in channel size apparently results from a sudden decline in channel slope and associated stream power, the cohesive nature of downstream alluvium, its retention on the channel banks by a dense cover of pasture grasses, and the availability of an extensive floodplain to carry displaced floodwater. Under these conditions floodwaters very frequently spill out over the floodplain and the downstream channel-flow becomes a relatively unimportant component of the total peak discharge. This emphasizes the importance of these floodplains as a part of the total channel system. In situations where urban development has increased peak runoff and reduced the available area of effective floodplain, stream channels formed in this fine alluvium rapidly entrench and increase in cross-sectional area by 2-3 times. Minor man-induced channel alteration and maintenance appears to trigger this enlargement. © 1981.