Abstract This study assessed the significance of a multi-functional and multi-compartment constructed wetland (CW) implemented to restore a degraded urban waterway in Western Australia. The wetland was initially constructed as a surface flow system, then modified through the incorporation of the additional laterite-based subsurface flow system, with the potential for operation of a recirculation scheme and groundwater top-up during low water flows in summer. The CW performance was assessed by comparing nitrogen (N) and phosphorus (P) attenuation during base flow, high flow and episodic storm flow conditions. The performance varied from approximately 41% total nitrogen (TN) and 66% total phosphorus (TP) loads reduction during storm events, increasing up to 62% TN and 99% TP during low flow and summer recirculation periods. In overall, the CW attenuated about 45% TN and 65% TP loads from being delivered to the downstream sensitive river between 2009 and 2015. The CW design proved to be not only highly effective at reducing nutrient loads, but also improved the ecological services of the urban waterway by providing a diverse area for habitat and recreational activities.