Acid mine drainage (AMD) is a legacy of historical coal mining that affects several thousand stream kilometers around the world by contributing high loads of acidity, SO₄²⁻, metals, and other cations. Most research has focused on how AMD affects diversity and structure of various biological assemblages, whereas considerably less has focused on functional processes in streams. We investigated how AMD from abandoned coal mines affects epilithic biofilm development and function. Algal biomass and accrual rates were significantly lower in AMD-affected stream reaches than in control streams. Biomass and accrual rates were lowest at intermediate AMD-affected sites (pH  =  5.1–5.9), probably because copious amounts of AlOH₃ precipitates smothered the benthic habitat. Ratios of β-glucosidase (GLU):β-xylosidase (XYLO) were significantly correlated with algal biomass (r  =  0.60, p < 0.01), probably because algae are important sources of C that is readily broken down by bacterial GLU activity, whereas XYLO is mostly associated with C of allochthonous origin. Thus, reduced algal biomass could indirectly exacerbate AMD effects on bacterial function by providing less C needed for cellular functions. Ratios of phosphatase∶leucine aminopeptidase significantly increased as pH decreased (R²  =  0.88, p < 0.01). This increase indicated potential P limitation or stressful conditions for microbial communities because PO₄-P readily adsorbs to metal hydroxides, rendering it biologically inaccessible. Ratios in 3 of 4 control streams indicated that N limitation may be more typical in unaffected streams of the region. Low algal biomass and potential P limitation of biofilms may indicate that AMD-affected streams have reduced capabilities to retain nutrients and energy needed to support healthy ecosystems. Considering the links between biofilm structure and function can provide a framework for developing management strategies to restore and conserve ecosystem processes, such as nutrient retention and spiraling, energy flow, food webs, and biodiversity.