While climate change severely affects some aquatic ecosystems, it may also interact with anthropogenic factors and exacerbate their impact. In dry climates, dams can cause hydrological drought during dry periods following a great reduction in dam water discharge. However, impact of these severe hydrological droughts on lotic fauna is poorly documented, despite climate change expected to increase drought duration and intensity. We document here how dam water discharge was affected by climate variability during 2011–2018 in a highly modified watershed in northeastern Algeria, and how an endemic endangered lotic damselfly, Calopteryx exul Selys, 1853 (Odonata: Calopterygidae), responded to hydrological drought episodes. Analysis was based on a compilation of data on climate (temperature, precipitation, and drought index), water dam management (water depth and discharge volume and frequency), survey data on C. exul occurrence, and capture–mark–recapture (CMR) of adults. The study period was characterized by a severe drought between 2014 and 2017, which led to a lowering of dam water depth and reduction of discharge into the river, with associated changes in water chemistry, particularly during 2017 and 2018. These events could have led to the extirpation of several populations of C. exul in the Seybouse River (Algeria). CMR surveys showed that the species was sensitive to water depth fluctuations, avoiding low and high water levels (drought and flooding). The study shows that climate change interacts with human water requirements and affects river flow regimes, water chemistry and aquatic fauna. As drought events are likely to increase in the future, the current study highlights the need for urgent new management plans for lotic habitats to maintain this species and possible others.