Human impacts on watershed hydrology are widespread in the US, but the prevalence and severity of stream-flow alteration and its potential ecological consequences have not been quantified on a national scale. We assessed streamflow alteration at 2888 streamflow monitoring sites throughout the conterminous US. The magnitudes of mean annual (1980–2007) minimum and maximum streamflows were found to have been altered in 86% of assessed streams. The occurrence, type, and severity of streamflow alteration differed markedly between arid and wet climates. Biological assessments conducted on a subset of these streams showed that, relative to eight chemical and physical covariates, diminished flow magnitudes were the primary predictors of biological integrity for fish and macroinvertebrate communities. In addition, the likelihood of biological impairment doubled with increasing severity of diminished streamflows. Among streams with diminished flow magnitudes, increasingly common fish and macroinvertebrate taxa possessed traits characteristic of lake or pond habitats, including a preference for fine-grained substrates and slow-moving currents, as well as the ability to temporarily leave the aquatic environment.