Three species of New Zealand chironomid, Chironomus sp. a, Chironomus zealandicus and Polypedilum pavidus were studied for their potential as biological indicators of freshwater environmental pollution and for use as laboratory bioassay species. A standard methodology was developed to successfully culture these three chironomids in the laboratory in order to obtain all larval stages of each species for laboratory bioassays. Head capsule deformities and physical wear were examined for C. zealandicus collected from four study sites in summer and winter from 1994 to 1996, and from larvae reared for two successive generations in a control substrate. Results showed that the incidence of head capsule deformity was influenced by both substrate type and season. The cause of this deformation was not identified although sediment chemistry, genetics and other physico-chemical factors are collectively implicated. Significantly greater frequency of physical wear of head capsule structures in larvae collected from Hamurana Stream and a progressive decline of wear in larvae reared on a paper towel control substrate indicated that feeding activity on a relatively coarse substrate may have caused the wear. A field survey indicated that, although all these species were present at every site, they show particular site preference. A life cycle test was performed to investigate the substrate preference of C. sp. a and C. zealandicus on sediments collected from the four study sites, Hamilton Lake, Lake Ngaroto and Hamurana Stream and Sulphur Point of Lake Rotorua. Results showed that Lake Ngaroto sediment and Sulphur Point sediment favour C. sp. a and C. zealandicus respectively. The acute toxicity of arsenite (Aѕ³⁺), arsenate (Aѕ⁵⁺) and copper (Cu²⁺) under different conditions was investigated. Although C. zealandicus and C. sp. a are closely related, they showed considerable difference in sensitivity to arsenic and copper. A number of biological (age), chemical (valency state), and physical (season, temperature) factors were observed to affect the toxicity of arsenic and copper to the test chironomid species. Chronic sublethal effects of arsenic-spiked sediments from Hamilton Lake and Lake Ngaroto and a paper towel substrate on C. zealandicus and C. sp. a were also studied under laboratory conditions. This study showed that the sensitivity of the chironomid species varied depending on the length of exposure to the spiked sediment, the number of endpoints examined, and other laboratory testing conditions such as renewal of dilution water. This experiment also indicated that C. zealandicus was more resistant to arsenic spiked sediment than C. sp. a. A protocol was developed for conducting standard sediment toxicity tests. The results of this work imply that although one or more of the chironomid species used in this study may be used as a bioindicator in monitoring freshwater lakes, use of these species as indicator organisms should be carefully assessed based on their occurrence in the location concerned. Although these three species may be used in laboratory bioassays, C. zealandicus appeared to be more convenient because of its continuous abundance at study sites and tolerance to physical handling.