Canine elbow dysplasia is a debilitating condition of unknown aetiology and is a common cause of forelimb lameness in dogs. Canine hydrotherapy is a therapeutic approach rapidly increasing in popularity for the treatment of a range of musculoskeletal pathologies. In this study, kinematic analysis was used to assess the effect of a customised hydrotherapy session on the range of motion, stride length and stride frequency of healthy Labrador retrievers (n = 6) and Labrador retrievers diagnosed with bilateral elbow dysplasia (n = 6). Reflective kinematic markers were attached to bony anatomical landmarks and dogs were recorded walking at their preferred speed on a treadmill before and 10 min after a single hydrotherapy session. Range of motion, stride length and stride frequency were calculated for both forelimbs. Data were analysed via a robust mixed ANOVA to assess the effect of hydrotherapy on the kinematic parameters of both groups. Range of motion was greater in the healthy dogs at baseline (P < 0.05). Hydrotherapy increased the range of motion of the forelimbs of both groups (P < 0.05); dogs with elbow dysplasia demonstrated a greater improvement in range of motion than healthy dogs (P < 0.05). Hydrotherapy stride length (P < 0.01) of all dogs, but differences were not seen between the two groups. Stride frequency increased after hydrotherapy only in the left limb (P < 0.05) in all dogs. These results support the potential of canine hydrotherapy as a therapeutic tool for the rehabilitation and treatment of Labradors with elbow dysplasia. Furthermore, results indicate that hydrotherapy might improve the gait and movement of healthy dogs. However, whether these results are transient or sustained remains undetermined.