Much of the upper catchment is forested and is generally in good condition. However in cleared areas, extensive erosion has resulted in sediment transportation downstream.
The floodplain below Bruthen is extremely fertile and was one of the first areas in the region to be cleared for agriculture. It makes a significant economic contribution to Bruthen and Bairnsdale. Fodder, beef and dairy production are the main land uses.
Drainage of this naturally low-lying land has been a major concern for farmers, a problem compounded by the deposition of sand from upstream and the aggradation (rising) of the river bed.
The Tambo River has an extensive estuary extending from The Cliffs (upstream of the township of Swan Reach) to the Gippsland Lakes at Lake King. Significant wetlands along the estuary reach of the river include the East Swamps (south of Sardine Flat Road), Lake King Wetlands and Russells Swamp.
These wetlands are part of the Gippsland Lakes Ramsar site which is listed as internationally important under the Convention on Wetlands (Ramsar, Iran, 1971).
Bank erosion below the highway bridge at Bruthen following the 1998 floods.