Habitat modification is an established method of effective long-term mosquito management, particularly in salt-marsh environments. It is especially pertinent when mosquitoes are known vectors of life-threatening disease and their larval breeding habitat is in close proximity to residential areas. The Ilparpa Swamp is located less than 10 km from Alice Springs, Northern Territory. Wet season rainfall, often followed by effluent discharges to the swamp from the adjacent sewage treatment plant, create ideal sites for the immature stages of the common banded mosquito Culex annulirostris (Skuse), a major vector of Murray Valley encephalitis (MVEV) and Kunjin (KUNV) viruses. Subsequent to increases in notifications of MVEV disease cases in 2000 and 2001, a drainage system was established in the Ilparpa Swamp in early 2002. This paper evaluates the drainage intervention effects. Results indicate a significant reduction in mosquito numbers following habitat modification, which remain low. There have been no seroconversions in sentinel chickens to MVEV or KUNV and no human infections from these viruses in the Alice Springs urban region since the drains were completed. Habitat modification has successfully reduced mosquito numbers and minimized the risk for mosquito-borne disease to residents in Alice Springs urban and surrounding areas, which has never before been documented in Australia.