Acid mine drainage from open-cast coal mining has had detrimental effects on water quality and ecology in Herbert Stream, a low volume drainage on New Zealand's Stockton Plateau, due apparently to the low pH (3.19-3.39) and elevated Al (dissolved Al = 8.1-11.4 mg/L). The long-term management liability, difficulty of diverting flow to existing treatment facilities, lack of space, and ready access to a large volume of circumneutral water (the Mt Frederick (MF) Quarry Lake) made dilution of Herbert Stream a potentially attractive management option. Dilution experiments showed that to achieve a pH > 4.5 or a dissolved Al concentration of < 1.0 mg/L, mixtures comprising 73 or 90 % by volume of MF water, respectively, are required. To achieve Al3+ < 0.42 mg/L, a previously determined ecological threshold concentration above which macroinvertebrate richness is significantly reduced, a dilution of > 85 % MF water is required. However, geochemical speciation modelling indicated that at about this dilution, small changes in dilution result in large changes in the proportion of dissolved Al present as Al+3. In addition, while the proportion of Al3+ decreases significantly once the pH is sufficiently high to support the formation of Al hydroxide complexes (at > 62 % MF water), precipitation of Al hydroxide and hydroxy-sulphate mineral phases also occurs at these dilutions. These precipitates and chemical species have established toxic effects. Negative ecological impacts across a range of dilutions, as well the difficulties of controlling dilution to the fine degree required within naturally variable streamflows, means that the use of simple dilution to manage Al toxicity in Herbert Stream is unlikely to be effective.