The Department of Conservation (DOC) is implementing a new natural heritage management system (NHMS). To support this, a national monitoring system for biodiversity is required. The monitoring system will provide a framework for monitoring biodiversity and reporting on its status and trend. It will include the development of sophisticated databases and a range of tools to assist managers in defining outcomes, planning and prioritising natural heritage work, and selecting and implementing projects. The objectives of this report are to: a) Review the rationale and mandate for biodiversity inventory and monitoring systems internationally, and identify the major points relevant for New Zealand. b) Assess current and previous biodiversity inventory and monitoring in New Zealand, and determine the key factors maintaining an effective biodiversity assessment system. c) Develop a framework for biodiversity condition measurement, and design a biodiversity inventory and monitoring programme. d) Identify outcomes that could be measured to assess management effectiveness and progress in maintaining indigenous biodiversity.