Reed invasion is a common phenomenon of open streams with disturbed riparian vegetation in river catchments. Knowledge of the effects of such vegetation change on aquatic communities is fundamental to river management. Macroinvertebrate fauna in Phragmites australis (Cav.) Trin. ex Steud. and open bank habitats were examined in three rivers in central Victoria in order to understand the effect of such littoral habitat on macroinvertebrates. Data were analysed using Partially Nested Factorial ANOVA with season, river and habitats as main effects. Habitat structure had a significant effect (p < 0.05) on macroinvertebrate species richness, however this was not seasonally consistent across the three rivers. There was a significant increase (p < 0.05) in macroinvertebrate taxa richness in Phragmites habitats during winter and spring seasons. Total abundance of taxa showed no consistent significant differences in the two habitats. Results of Canonical Analysis of Principle Coordinates indicated significant differences (p < 0.05) in macroinvertebrate assemblages between Phragmites and bare bank habitats in all seasons. Habitat selection by taxa could be related to the microphysical environment of the habitats. This study suggests that reed beds create important littoral habitat structures which support diverse macroinvertebrate assemblages.