An assessment of the benthic macroinvertebrate community was conducted to characterize the ecological recovery of a channelized main stem and two small tributaries at the Watershed Research and Education Center (WREC, Arkansas, USA). Three other headwater streams in the same basin were also sampled as controls and for biological reference information. A principal components analysis produced stream groupings along an overall gradient of physical habitat integrity, with degraded reaches showing lower RBP habitat scores, reduced flow velocities, smaller substrate sizes, greater conductivity, and higher percentages of sand and silt substrate. The benthic macroinvertebrate assemblage at WREC was dominated by fast-reproducing dipteran larvae (midge and mosquito larvae) and physid snails, which comprised 71.3% of the total macroinvertebrate abundance over three sampling periods. Several macroinvertebrate assemblage metrics should provide effective targets for monitoring overall improvements in the invertebrate assemblage including recovery towards a more complex food web (e.g., total number of taxa, number of EPT taxa, percent 2 dominant taxa). However, current habitat conditions and the extent of existing degradation, system isolation and surrounding urban or agricultural land-uses might affect the level of positive change to the system. We therefore suggest a preliminary restoration strategy involving the addition of pool habitats in the system. At one pool we collected a total of 29 taxa (dominated by water beetle predators), which was 59% of total number of taxa collected at WREC. Maintaining water-retentive pools to collect flows and maintain water permanence focuses on enhancing known biology and habitat, thus reducing the effects of abiotic filters on macroinvertebrate assemblage recovery. Furthermore, biological assessment prior to restoration supports a strategy primarily focused on improving the existing macroinvertebrate community in the current context of the system, thereby reducing costs associated with active channel restoration. Monitoring future biological recovery and determining the contribution of changing assemblages to specific ecological processes would provide a critical underpinning for adaptive management and ecologically-effective restoration.