1. The European Union's Water Framework Directive requires all water bodies to achieve ‘good ecological status’ by 2015 and this paper describes a rationale for defining ‘good ecological status’ based on diatoms, a significant component of the biological quality element ‘macrophyte and phytobenthos’. 2. A database of benthic diatom samples collected over the past 20 years was assembled. New sampling, specifically for this project, was undertaken during 2004 to supplement these data. In total 1051 samples were included in the database with matching environmental data. 3. ‘Reference sites’, relatively unimpacted by human activity, were selected from this database by a series of screening steps and these sites were used to develop a site-specific reference typology. 4. Environmental variables not related to the pressure gradient were used to predict the ‘expected’ Trophic Diatom Index (TDI) values at each site. Site-specific TDI predictions were used to generate ecological quality ratios (EQRs) ranging from ≥1, where the diatom assemblage showed no impact, to (theoretically) 0, when the diatom assemblage was indicative of major anthropogenic activities. 5. The boundary between ‘high’ and ‘good’ status was defined as the 25th percentile of EQRs of all reference sites. The boundary between ‘good’ and ‘moderate’ status was set at the point at which nutrient-sensitive and nutrient-tolerant taxa were present in equal relative abundance. An ecological rationale for this threshold is outlined in the paper.