Urban land use degrades stream ecosystems, but the nature and mechanisms of its effects on ecological processes, such as leaf breakdown, are poorly understood. Leaf litter breakdown has pivotal effects on energy and nutrient flows in stream ecosystems. Our goals were to test the effect of catchment urbanization on breakdown rates of leaves of 2 common riparian species in southeastern Australia and to identify the mechanisms responsible for changes in breakdown rates. Catchment urbanization was quantified as the percentage of catchment covered by impervious surfaces with connection to streams via stormwater sewers (effective imperviousness [EI]). Eucalyptus obliqua and Pittosporum undulatum leaf packs were placed in 6 streams that ranged from 0 to 20% EI. Packs were left for up to 69 d and, upon removal, were analyzed for mass loss, microbial activity, and abundance of associated shredding macroinvertebrates. Stream nutrient concentrations, temperature, and abrasive flow were measured as potential correlates of leaf breakdown. Pittosporum undulatum leaves broke down faster than those of E. obliqua. Breakdown rates of P. undulatum, but not E. obliqua, leaves increased as EI increased. Faster P. undulatum breakdown in streams with higher EI probably was caused by greater microbial activity (associated with higher temperatures and P concentrations) but not by differences in shredder abundance or abrasive flow. Elevated microbial activity in urban streams has a greater effect on leaf species with more-labile C than on leaf species with refractory C. In urban streams with large proportions of labile leaf litter, increased microbe-driven breakdown might decrease benthic organic matter availability and ultimately impair ecosystem function. Physical abrasion is not necessarily an important agent in faster breakdown, despite the increased hydrologic flashiness of urban streams. Effects of urbanization that accelerate leaf breakdown in streams could be mitigated through eradication of exotic riparian trees with leaves that are more labile than those of indigenous species and through management measures that reduce stream temperatures and nutrient concentrations.