Efforts to rehabilitate degraded urban streams generally focus on improving physical habitat and rarely include reestablishing biota such as macrophytes. Our objectives in this study were to propagate and transplant native macrophytes into a South Island, New Zealand, urban stream undergoing rehabilitation, assess macrophyte survival and growth, and determine whether native macrophytes suppress non-native macrophytes and/or enhance stream invertebrate communities. Effects of native macrophytes on invertebrates and non-native macrophytes were assessed after transplanting patches of native macrophytes into a 230-m-long stream section. A 100-m-long section upstream was left unplanted for subsequent comparisons. Following the study, a survey was conducted to gauge public opinion about the rehabilitation project and determine whether macrophytes were prominent in perceptions of stream health. In the first growing season, native macrophyte cover in the planted stream section increased from 1.5 to 20%, and then decreased during winter. Regrowth from rhizomes led to rapid aboveground growth during the second year, when cover reached 51%. Non-native macrophytes colonized the stream the first year, but native macrophytes appeared to limit the spread of non-natives, which were absent in the planted section by the second spring. Native macrophyte establishment did not enhance invertebrate communities as predicted; few invertebrate metrics differed significantly between the planted and unplanted sections. Pollution- and sediment-tolerant invertebrate taxa were abundant in both sections, suggesting that invertebrate colonization was limited by water quality or sedimentation, not macrophyte composition. Survey respondents considered the stream to be visually and ecologically improved after rehabilitation, and macrophyte establishment was generally considered positive or neutral.