We examined the effect of vertical hydrological exchange on physicochemical variables, periphyton biomass (ecosystem properties), and sediment respiration (ecosystem process) at 2 spatial scales along a large gravel-bed river (Tagliamento River, northeastern Italy). At the regional scale, we investigated a 29-km-long, expanding and contracting, losing (average flow decrease 2.5 m3 s−1 km−1) and a 12.5-km-long, stable, gaining (average increase 0.3 m3 s−1 km−1) reach. At the local scale, we sampled riffle head and riffle tail units nested within the losing and gaining reaches. At the regional scale, we characterized vertical exchange by strong downwelling (negative vertical hydraulic gradient; VHG) in the losing and moderate upwelling (positive VHG) in the gaining reach. Nutrients, such as NO3-N and dissolved N (DN), and periphyton biomass (AFDM) showed a significantly (p < 0.05) lower concentration in the losing than in the gaining reach. A contrasting pattern emerged for sediment respiration. Expansion and contraction dynamics (i.e., drying and rewetting) in the losing reach negatively affected chlorophyll a and AFDM. At the local scale, VHG was negative at riffle heads and positive at riffle tails nested in the gaining reach, but variables did not respond to vertical exchange at riffle heads and riffle tails in the losing or gaining reach. However, averaged data from riffle heads and riffle tails in the losing reach compared to averaged data for riffle heads and riffle tails in the gaining reach showed the same pattern as found in the regional investigation. Vertical exchange was apparently a major factor influencing ecosystem properties and ecosystem processes hierarchically across different spatial scales.