The breakdown rates of Alnus glutinosa leaves and the structure of macroinvertebrate communities were used to evaluate the impact of the village of Montalegre (Portugal) on the water quality of the Cávado river. Chemical and microbial analyses of stream water indicated a high organic load in the vicinity of the village. The abundance of macroinvertebrates associated with leaves increased along the pollution gradient, whereas richness of the community decreased. Biotic indices and multivariate analysis applied to aquatic macroinvertebrate communities discriminated polluted from non-polluted sites. Exponential breakdown rates of alder leaves were high (0.014 to 0.060 day-1) and the differences observed among sites suggested that nutrient enrichment stimulated leaf breakdown significantly. Leaf breakdown rates have not reflected improved biotic conditions as assessed by biotic indices at the most downstream site. These results suggest that both data from the structure and function of a stream are important for assessing water quality.