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Summary Land-use changes have negative effects on stream conditions and fish assemblages, but their effects on water quality and the use of microhabitats by fish in subtropical lowland streams are unclear. We evaluated the effects of urban patches (two urban streams) in an agricultural matrix (two ‘agricultural’ streams) on water quality, microhabitat diversity and fish assemblages, as well as the selection of microhabitat types by fish in the Arroyo Colorado basin (Uruguay). Physicochemical water parameters were measured, the fish sampled using electrofishing, microhabitat diversity, occupancy of microhabitats by fish and the most important microhabitat types for fish species were analysed. Agricultural streams presented higher water quality and microhabitat diversity, and most of the microhabitats were occupied by fish. Microhabitats with medium substrate sizes and running water prevailed in urban streams, while the presence of macrophytes, shallow waters and different substrate sizes were common in agricultural streams. The most important microhabitats used by fish species were not the most abundant, highlighting the fragility of streams resulting from the loss of appropriate conditions. Understanding how different degrees of deterioration in streams affect water quality and microhabitat–fish interactions is essential for the designing of effective monitoring and restoration programmes.

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Human land‐use change is a major threat to natural ecosystems worldwide. Nonetheless, the effects of human land‐uses on the structure of plant and animal assemblages and their functional characteristics need to be better understood. Furthermore, the pathways by which human land uses affect ecosystem functions, such as biomass production, still need to be clarified. We compiled a unique dataset of fish, arthropod and macrophyte assemblages from 61 stream ecosystems in two Neotropical biomes: Amazonian rainforest and Uruguayan grasslands. We then tested how the cover of agriculture, pasture, urbanization and afforestation affected the taxonomic richness and functional diversity of those three species assemblages, and the consequences of these effects for animal biomass production. Single trait categories and functional diversity were evaluated, combining recruitment and life‐history, resource and habitat‐use, and body size. The effects of intensive human land‐uses on taxonomic and functional diversities were as strong as other drivers known to affect biodiversity, such as local climate and environmental factors. In both biomes, the taxonomic richness and functional diversity of animal and macrophyte assemblages decreased with increasing cover of agriculture, pasture, and urbanization. Human land‐uses were associated with functional homogenization of both animal and macrophyte assemblages. Human land‐uses reduced animal biomass through direct and indirect pathways mediated by declines in taxonomic and functional diversities. Our findings indicate that converting natural ecosystems to supply human demands results in species loss and trait homogenization across multiple biotic assemblages, ultimately reducing animal biomass production in streams.

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