Dense macrophyte beds are known to produce extreme diurnal oxygen and temperature conditions in shallow lakes. However their influences in managed hydropeaking reservoirs has received limited attention. We measured dissolved oxygen, pH and water temperature in the Lake Kar apiro hydroreservoir, northern New Zealand, across a gradient of proportional water-column height occupied by the invasive macrophytes Egeria densa and Ceratophyllum demersum, which dominated in the upperriverine (variable water inflow) and lower-lacustrine (variable water level) sections, respectively. Hypoxia and anoxia events that occurred inside invasive macrophyte beds during their summer peak biomass accumulation period were more pronounced for C. demersum than for E. densa, and within the bottom 20% of the water column. In contrast, pH and temperature changed little in relation to proportional macrophyte height. Macrophyte species differences in the production of hypoxia and anoxia events increased when site-specific hydropeaking management covariates (depth, inflows, water level) were accounted for. This association with hydropeaking likely resulted from contrasting hydrodynamics in the lower-lacustrine and upper-riverine lake sections, where oxygen can decrease with higher water levels and lower water inflow rates, respectively. During the course of our study, some macrophyte beds were treated with herbicide, enabling us to document prolonged and sustained hypoxic/anoxic conditions near the bottom following spraying. These results underscore the adverse effects of invasive macrophytes on water physicochemical attributes that sustain aquatic biota, and highlight the context-dependent nature of these effects moderated by reservoir management for hydropeaking and macrophyte control.