Stream habitat complexity is correlated with fish species diversity in selected Indiana and Panama streams. Habitat diversity was measured along 3 dimensions judged important to a wide range of fish groups and applicable to many stream conditions: stream depth, bottom type, and current. Increasing community and habitat diversity followed stream-order gradients. Natural streams supported fish communities of high species diversity which were seasonally more stable than the lower-diversity communities of modified streams. After disturbances such as channelization, seasonal peaks in species diversity attain levels typical of undisturbed streams. Because seasonal changes in stream quality are high, the stability of the fish community is lower in modified than in natural streams. The general correlation between habitat characteristics and presence and absence of fish species suggests that most fishes of small streams are habitat specialists. http://www.esajournals.org/doi/abs/10.2307/1936581