Wetlands in arid and semi-arid areas face intensifying pressure for their water resources yet harbor unique biota and ecological processes that rely on the "boom and bust" regime of alternating flood and drought. Recent research in Australia has revealed that models of ecosystem processes derived from northern temperate zone wetlands are often inapplicable to arid zone wetlands, confounding efforts to manage or protect these threatened habitats. We review four case studies from inland Australia that demonstrate different degrees of successful management, aiming to draw out lessons learned that will improve our sustainable use of these delicate systems. Inappropriate extrapolation across scales that ignores the inherent spatial and temporal variability of arid-zone wetlands, "reactive" rather than "collaborative" research and management, and a reluctance to adopt functional indicators to complement state variable are several common themes. We are optimistic that managers and researchers are collaborating to tackle these issues but warn that a parched future faces some wetlands where jurisdictional boundaries hamper their effective management or entrenched beliefs and community distrust of managers threaten ecologically sustainable resource use. In arid areas where water is so precious, environmental allocations are costly and their long-term effects are difficult to identify against a backdrop of high inherent variability. Preservation of this variability is the key to successful management of these "boom and bust" systems but diametrically opposes the desire for regulated, reliable water supplies for human use. Social and institutional acceptance and change now appear to be greater barriers than limited ecological understanding to effective management of many "parched wetlands" in Australia.