The absence of quantified relationships among sediment supply, stream channel conditions, and biological responses limits our ability to predict the cumulative watershed effects of management activities in forested mountainous watersheds. We addressed this uncertainty by testing whether increased sediment supply resulted in elevated levels of streambed fine sediment stored in pools and riffles and whether fine bed material was correlated with spawning-gravel quality and altered benthic macroinvertebrate assemblages in 6 streams of the Klamath Mountains, northern California. Sediment supply was estimated using 2 models: 1) an empirical model of landslide volumes based on terrain types present in a basin, and 2) a surface erosion model using a locally calibrated version of the universal soil loss equation. Riffle-surface fine sediment and the fractional volume of pools filled with fine sediment (V*) were both positively correlated with estimated sediment supply, whereas subsurface spawning-gravel permeability was inversely correlated with estimated sediment supply. Fine sediment levels were relatively low compared to published values. Reach-average values of riffle-surface fine sediment ranged from 4 to 16% and V* values ranged from 0.05 to 0.20. Based on established relationships between subsurface flow rates and salmonid egg survival, median predicted egg survival was quite low and ranged from 15 to 38%. Riffle-surface fine sediment and common benthic macroinvertebrate biological metrics were not correlated, but several taxa showed responses to riffle-surface fine sediment. Taxa that showed negative responses to fine sediment are hypothesized to be more available as prey for salmonids than taxa that showed positive responses. This relationship suggests that fine sediments might cause an overall reduction in prey availability for salmonids. Monitoring the effects of increased sediment supply in steep, forested streams should focus on fine sediment in pools and riffles, salmonid spawning-gravel quality, and specific macroinvertebrate taxa that are especially responsive to fine sediment. The linkages described in our paper can be used to make quantitative predictions of the cumulative watershed effects of management activities on stream conditions, salmonid habitat, and benthic macroinvertebrates.