Originating in Glacier Park, Montana, the transboundary St. Mary River has provided a focus for international water sharing for a century. It was dammed and diverted in the USA, and more extensively in Alberta, where it supports Canada's centre for agricultural irrigation. Following water withdrawals, the riparian cottonwoods (Populus angustifolia) collapsed, and we assessed the woodland decline downstream from the St. Mary Dam, through eight sets of aerial photographs over seven decades. These revealed 88% woodland loss from 1951 to 1999 (R2 = 0.984), including a steeper decline with the 1980s drought. Following the implementation of an environmental flow regime that increased minimum flows after 1993, the remnant woodlands were stabilized, with a slight recovery by 2022. Analyses of the historical hydrology revealed compound contributions to the woodland mortality. (1) Annual river flows declined with increasing water diversion, and (2) late summer flows were particularly depleted. (3) Dam operations resulted in abrupt stage recessions and irregular spikes. (4) Accompanying climate warming, the spring snowmelt advanced and late summer flows declined. (5) The greatest climatic influence involved multiple‐year clusters with high versus low flows, corresponding with the Pacific decadal oscillation (PDO) from 1920 to 1990 (R2 = 0.365), but less coupled thereafter. This long‐term study demonstrates the coordination between hydroclimatic variation, water management and the fate of riparian woodlands, which reveal ecosystem health. An environmental flow regime provided benefit, and for other regulated rivers in dry ecoregions, we recommend functional flow regimes that provide sufficient minimum flows and avoid abrupt flow recession or irregular spikes.