We developed an Index of Biotic Integrity (IBI) for the Interior Plateau Ecoregion (IPE), USA, which assessed effects of human disturbance on the biotic condition of stream diatom communities. We selected 7 metrics from 59 diatom attributes at reference and impaired sites (training sites), based on significant differences between site groups using the Mann–Whitney U test, high separation power, and a low coefficient of variation. We calculated IBIs by summing metrics for a site after transforming them to a discrete 1, 3, 5 scale or a continuous 0–10 scale. Both discrete and continuous scaling systems successfully separated reference and impaired sites, and IBI scores were significantly related to agricultural land use in IPE watersheds. We then tested the diatom IBI using a 2^nd data set from IPE streams (test sites), processed by slightly different sampling methods and taxonomic references, and classified sites as reference or impaired based on the same criteria used for the training-site data set. Diatom IBI scores differed significantly between reference and impaired streams and correctly classified 80% of sites in the test-site data set. Compared with other diatom IBIs, our measure showed higher separation power among sites and provided an accurate characterization of stream impairment in study watersheds. The developed diatom IBI can be a useful tool for stream and watershed management.