Aquatic plant communities in arid zone wetlands underpin diverse fauna populations and ecosystem functions yet are relatively poorly known. Erratic flooding, drying, salinity and turbidity regimes contribute to habitat complexity, creating high spatial and temporal variability that supports high biodiversity. We compared seed bank density, species richness and community composition of aquatic plants (submergent, floating-leaved and emergent) among nine Australian arid zone wetlands. Germinable seed banks from wetlands within the Paroo and Bulloo River catchments were examined at nested scales (site, wetland, wetland type) using natural flooding and salinity regimes as factors with nondormant seed density and species richness as response variables. Salinity explained most of the variance in seed density (95%) and species richness (68%), with flooding accounting for 5% of variance in seed density and 32% in species richness. Salinity-flooding interactions were significant but explained only a trivial portion of the variance (<1%). Mean seed densities in wetlands ranged from 40 to 18,760 m−2 and were highest in wetlands with intermediate levels of salinity and flooding. Variability of densities was high (CVs 0.61–2.66), particularly in saline temporary and fresh permanent wetlands. Below salinities of c. 30 g l−1 TDS, seed density was negatively correlated to turbidity and connectivity. Total species richness of wetlands (6–27) was negatively correlated to salinity, pH and riverine connectivity. A total of 40 species germinated, comprising submergent (15 species), floating-leaved or amphibious (17 species), emergent (6 species) and terrestrial (6 species) groups. Charophytes were particularly important with 10 species (five Chara spp., four Nitella spp. and Lamprothamnium macropogon), accounting for 68% of total abundance. Saline temporary wetlands were dominated by Ruppia tuberosa, Lamprothamnium macropogon and Lepilaena preissii. Variable flooding and drying regimes profoundly altered water quality including salinity and turbidity, producing distinctive aquatic plant communities as reflected by their seed banks. This reinforces the importance of hydrology in shaping aquatic biological communities in arid systems.