Daphnia lumholtzi is a crustacean zooplankter native to Africa, Australia, and Asia that has recently appeared in the USA. It was first detected in Texas in 1990 and has since spread throughout areas of the midwestern and southern areas of the US. D. lumholtzi was detected in Canyon Lake, Arizona, in the spring of 1994. A survey of reservoirs on the major river drainages in central Arizona was conducted to assess the extent and degree of invasion of this exotic species. In addition, competition experiments were performed for both the native Daphnia pulex and the introduced D. lumholtzi. D. lumholtzi was found in three river drainages (Bill Williams, Salt, Verde) and was absent from the the Agua Fria and lower Colorado. No headwater impoundments had D. lumholtzi. In the competition experiments D. lumholtzi alone demonstrated significantly lower production than D. pulex alone. When present together, D. pulex production was suppressed to 17% of its control production while D. lumholtzi was reduced to 55% of its control production. More importantly, production in the mixed treatment was <50% of the native D. pulex control, indicating exploitive competition and potentially reduced zooplankton community production. It appears that D. lumholtzi is spreading rapidly and potentially exerting a strong negative influence on native daphnid populations which may have pronounced direct effects on planktivores and indirect effects on piscivores.