ABSTRACT: We analyzed data from riffle and snag habitats for 39 small cold water streams with different levels of watershed urbanization in Wisconsin and Minnesota to evaluate the influences of urban land use and instream habitat on macroinvertebrate communities. Multivariate analysis indicated that stream temperature and amount of urban land use in the watersheds were the most influential factors determining macroinvertebrate assemblages. The amount of watershed urbanization was nonlinearly and negatively correlated with percentages of Ephemeroptera-Plecoptera-Trichoptera (EPT) abundance, EPT taxa, filterers, and scrapers and positively correlated with Hilsenhoff biotic index. High quality macroinvertebrate index values were possible if effective imperviousness was less than 7 percent of the watershed area. Beyond this level of imperviousness, index values tended to be consistently poor. Land uses in the riparian area were equal or more influential relative to land use elsewhere in the watershed, although riparian area consisted of only a small portion of the entire watershed area. Our study implies that it is extremely important to restrict watershed impervious land use and protect stream riparian areas for reducing human degradation on stream quality in low level urbanizing watersheds. Stream temperature may be one of the major factors through which human activities degrade cold-water streams, and management efforts that can maintain a natural thermal regime will help preserve stream quality.