Benthic algae including benthic diatoms are one of the most vital primary producers in riverine ecosystems, and their spatial distribution and assemblage structure respond sensitively to various environmental variables. Thus, benthic diatoms have been widely used as indicators of water quality in riverine systems. Here, we present a study on benthic diatoms and water quality assessment using diatom indices in the upper Han River, a subtropical river with a length of 925 km in China. Canonical correspondence analysis indicated that spatial patterns of diatom assemblages could be primarily explained by dissolved organic carbon, pH, major ions, and flow velocity. Two-way indicator species analysis on the diatom assemblages grouped the sampling sites into those from mainstream and tributaries. There were also significant differences in the Shannon–Wiener diversity index, evenness index, species richness, and diatom indices between the mainstream and tributary sites, and diatom indices categorized the mainstream as mesotrophic and the tributaries as oligo-mesotrophic in the upper Han River. Lower water quality in the mainstream led to the dominance of pollution tolerant species such as Eolimna subminuscula, while tributaries were characterized by Achnanthidium pyrenaicum and A. subatomus. The research demonstrates the applicability of diatom indices for water quality and ecohealth assessment in subtropical rivers.