This study was focused on estimating instream flow, and its optimal alternative for securing the required total amount of instream flow was also researched in order to restore ecosystems and riverine aesthetics of the Mugeo Stream. the first tributary of the Taewha River flowing through the center of Ulsan. In this study the hydraulic and hydrologic conditions and water quality were investigated at specific channel reaches and representative stations of the Mugeo Stream to determine a proper estimate of instream flow. And riverine functions, such as the minimum flow, water duality conservation, fish habitat, and recreation, were considered to restore the environmental functions of the stream, As a result, the total amount of $11,500m^3/day$ was set as the target instream flow for the Mugeo Stream. It was chosen as the optimal alternative for securing the total external supply of $10,000m^3/day$ which have to be transfered from the riverbed flow diverted through the Taewha Main river at upstream of Samho bridge. The water duality throughout the Mugeo Stream channels will be improved considerably to 3-4 mg/l of BOD standard if the target instream flow is supplied and sewage is intercepted by the sanitary sewage system.