Environmental flows play a critical role in maintaining the physical, chemical, and biological functions of freshwater ecosystems. Yet, approaches for assessing ecosystem water needs have generally focused on habitat requirements of individual species, with limited attention given to the ecosystem processes that environmental flows support. A “functional flows" approach provides a conceptual foundation for identifying and managing aspects of the flow regime that maintain vital ecosystem processes. Here, we described efforts to incorporate functional flows in environmental water management through the California Environmental Flows Framework and associated decision-support tools. We also highlight a case study example from Putah Creek, a regulated river in California, where a functional flows approach guided the design of an environmental flows program implemented in 2000. We show that native fish responded positively to changes in the flow regime that shifted functional flow components, including dry season duration, fall pulse flow magnitude, and wet season timing, toward their natural range. Changes in these flow components generally had negative effects on the abundance of non-native fish species. However, functional flows components that shifted away from their natural range, including lower spring recession flows and higher dry season baseflows, had a negative effect on native fish species and a positive effect on non-natives. Although the flow regime remains highly modified in Putah Creek following environmental flow implementation, these results indicate that restoring functional components of the flow regime toward their natural range of variation can be an effective strategy for conserving native freshwater biodiversity.