On 24 January 1998, Tropical Cyclone Les developed over the Gulf of Carpentaria. As the cyclone reached land it weakened into a rain depression which moved towards Katherine.

In Katherine, rainfall began on 25 January and continued steadily for three days. During this time between 400 and 500 mm fell over the Katherine, Roper and Daly River catchments. Three people drowned in the floodwaters.

After two days of steady rain, on 27 January 1998, the Katherine River had risen to more than 20 m. The main street was covered by 2 m of muddy water and 2000 people abandoned their homes and possessions. Roads and transport links were extensively damaged and it took a number of days to repair. The community at Daly River was also affected by the flood as it moved downstream and 400 people were subsequently evacuated. Residents in the Roper and Moyle River catchment areas were also affected, with evacuations taking place from communities in these areas. 

The Insurance Council of Australia estimated the 1998 damage at $70 million, with the 2011 estimated normalised cost of $201 million.