One of the largest known populations of the federally endangered southwestern willow flycatcher (Empidonax traillii extimus) occurs at Roosevelt Lake, Arizona, USA. Modifications to Roosevelt Dam, completed in 1996, raised the height of the dam and resulted in a high probability of willow flycatcher habitat inundation within the reservoir's conservation pool. We collected habitat measurements and monitored 922 willow flycatcher nests from 1996 to 2006 to investigate effects of inundation on willow flycatcher habitat and subsequent changes in nest success, productivity, and distribution. Inundation of willow flycatcher habitat at Roosevelt Lake occurred in 2005, changing the location and amount of suitable breeding habitat and significantly altering habitat structure (e.g., thinner vegetation, more canopy gaps) of formally occupied nest sites. The willow flycatcher population at Roosevelt Lake decreased 47% from 209 territories in 2004 to 111 territories in 2006 in response to habitat changes. Willow flycatchers made fewer nesting attempts and nest success rates were significantly lower during inundation (2005 and 2006: 45%) than preinundation (1996–2004: 57%). Combined, these factors negatively affected the population's productivity during inundation. Although inundation caused extensive vegetation die-off, we did observe regeneration of vegetation in some areas at Roosevelt Lake in 2006. The Roosevelt Lake population remains one of the largest willow flycatcher populations in the state and territory numbers remain high enough that the population may not suffer long-term effects if sufficient suitable habitat continues to exist during the cycle of inundation and regeneration. Reservoir managers may be able to develop dam management guidelines that reduce damage to habitat, encourage habitat growth, and mimic the dynamic nature of unaltered riparian habitat. These guidelines can be implemented, as appropriate, at reservoirs throughout the willow flycatcher's range.