We assessed rates of organic matter (OM) processing in coarse gravel and fine benthic sediment, along with water temperature, in four clearfell harvested and two undisturbed headwater streams flowing through wet eucalypt forest in southern Tasmania, Australia. Clearfell forestry in Tasmanian wet eucalypt forest involves felling of all timber followed by a high intensity regeneration burn to provide a receptive mineral seedbed for seedling growth. Bacterial carbon production and cellulose decomposition potential (together referred to as OM processing) were measured seasonally 3–5 years before and 2–4 years after harvesting in each stream. We employed a staircase design (staggered harvesting treatments) within a multiple before–after control–impact design to distinguish harvesting effects from natural variation. Clearfell harvesting raised the yearly mean water temperature by between 0.25 °C and 0.94 °C, and raised the maximum water temperature by between 0.84 and 1.6 °C. Rates of cellulose decomposition were not significantly correlated with sediment temperature but bacterial carbon production showed weak, significant correlations with temperature in fine (r = 0.20, P = 0.01, n = 137) and coarse gravel sediment (r = 0.39, P