Common reed Phragmites australis is the dominant vascular plant species of the shorelines of the Gippsland Lakes, south-eastern Australia. Although substantial declines have been reported for over 50 years, with increasing salinity posited as the cause, P. australis still occurs around the Gippsland Lakes, including in environments with near-oceanic salinities. The occurrence of P. australis in highly saline environments cannot be explained in terms of either seasonal variations in surface water salinity or a freshwater subsidy provided by intrusions of non-saline groundwater into the root zone. An experimental growth trial with plants of different provenance showed that P. australis grew vigorously even at 8–16PSU (with maximum aboveground biomass at 2–4PSU). There was some evidence that specimens from saltier sites were more salt tolerant than those from fresher sites. The selection of salt-tolerant strains is the most likely explanation for the occurrence of P. australis in saline sites. However, anthropogenic salinisation is unlikely to be the only factor involved in the historical loss of reed beds, and lower and more stable water levels following the permanent opening of the Gippsland Lakes to the ocean in 1889 are probably also contributing factors.