The water depth and flow velocity of a river may be temporarily disturbed by the water level fluctuations connected with the operation of artificial dam reservoirs located downstream (so-called backwater fluctuations (BF)). In this research, we use the two-dimensional hydrodynamic model iRIC MFlow_02 to quantify the effects of BF on the lowermost section (ca. 1.5-km length) of a small (channel width ≤ 20 m) mountain stream, the Smolnik Stream, which flows into the Rożnów Dam Reservoir, in Southern Poland. To reproduce the hydrological conditions generally observed in the stream, six scenarios were simulated, considering three steady flow discharges at the inlet, with recurrence intervals of 1 year (1.8 m3 s−1, small flood), 2 years (24.5 m3 s−1; medium flood), and 20 years (89.5 m3 s−1; large flood), and two reservoir levels at the outlet: 265 m a.s.l. (normal reservoir water level) and 270 m a.s.l. (maximum reservoir water level). In these simulations, sediment transport and morphodynamics are not considered. The average modelled water depth was increased by backwater fluctuation in the channel, from 28% (from 1.62 m vs. 2.07 m) during a small flood, up to 59% (from 3.46 m to 5.50 m) during a large flood. Contrastingly, the average modelled flow velocity was decreased in the channel (from −8% 0.52 m s−1 vs. 0.47 m s−1) during a small flood to −78% (0.49 m s−1 vs. 0.11 m s−1) during a large flood. Our results demonstrate that backwater fluctuations substantially disturb the hydrodynamics of the studied stream, which is interpreted as a triggering factor of the previously documented alterations in its sedimentology, morphology, and riparian vegetation pattern.