The Kangaroo River is a tributary of the Shoalhaven River in the Southern Highlands region of New South Wales, Australia. The river rises within the Budderoo National Park about 3 kilometres (1.9 mi) north-west of Illawarra Lookout. It initially flows in a north-westerly direction to Carrington Falls, where the river crosses the western escarpment of the Budderoo Plateau. The river then turns to the south-west and flows through the communities of Upper Kangaroo Valley and Kangaroo Valley, and into the Morton National Park. The river ends its course by flowing into Lake Yarrunga, a reservoir formed by the Tallowa Dam and situated just downstream of the previous confluence of the Shoalhaven and Kangaroo Rivers. In total, the river is some 50 kilometres (31 mi) long.