Physico-chemical conditions of surface and hyporheic receiving waters were investigated in relation to invertebrate community structure, and epilithic algal production, at ten stream sites near Reefton, South Island. Physico-chemical conditions, benthic and hyporheic faunas and epilithic algal production were sampled over a 12 month period from March 1998 to February 1999. Stream water pH ranged from 2.9 (strongly mine-affected sites) to 7.1 (control sites) with acid mine drainage-affected streams also having little or no measurable alkalinity and high conductivity, reflecting high concentrations of metal ions. Concentrations of total iron and total dissolved aluminium were elevated at low pH. All streams with pH > about 4.5, had similar species richness and densities of invertebrates. In terms of numbers of species and individuals, the Plecoptera was the best represented insect order, followed by Trichoptera and Diptera at these sites. However, below pH 4.5, where concentrations of Fe were> 0.8 mg L-¹ and A1 > 0.4 mg L-¹ reductions in species richness and abundance were found and faunas were numerically dominated by Diptera, mainly Chironomidae. The presence of crustaceans, arthropods generally considered to be intolerant of acidic conditions, at nine of the ten sites, including those affected by acid mine drainage is noteworthy and consistent with the theory that many New Zealand streams invertebrates tolerate a wide range of physico-chemical conditions. In the laboratory, three species of insect tolerated higher concentrations of iron and lower pH than would be predicted from field surveys. Epilithic algal biomass was lowest at the most acidic sites (pH < 4.5) where metal Concentrations were elevated and precipitates prevented the attachment of algae to solid surfaces and may have inhibited photosynthesis. The greater species richness of streams with pH > 4.5 reflects the greater diversity of habitats and food resources available, in addition to their more equable water chemistry. Lastly, the chemistry of hyporheic water samples was very similar to that of surface waters and furthermore, surface sediment and hyporheic faunas had much in common. However, the diversity of the hyporheos was lower, and Crustacea, followed by Diptera and Plecoptera dominated at all hyporheic sites. The notable and distinguishing feature of the hyporheic faunas was the strong representation of harpacticoid copepods. The findings of this study indicate that not only are many New Zealand stream invertebrates found in both hyporheic and surface sediments, but at least on the West Coast of the South Island, they are also tolerant of low pH and elevated concentrations of iron and aluminium.