Reduced hydrologic connectivity has impacted aquatic ecosystems at species, population, community, ecosystem, and landscape levels by isolating populations, reducing gene flow, increasing risks of local extirpation and extinction, and altering ecosystem processes. Removal of dams and other barriers to connectivity has been shown to reverse these impacts and restore ecosystem processes. Here, I trace the development in North Carolina of a new policy by which to accomplish dam removal making dam removal an eligible compensatory mitigation activity. I then compare this policy to historic policy mechanisms utilized to remove dams, examine how it has been utilized to shift costs of dam removals from resource agencies to third parties, and analyze its potential for mitigating the impacts of infrastructure projects such as water supply reservoirs. I conclude with recommendations for the adaptation of this policy to other southeastern states, with emphasis on Georgia.