Ferric iron (Fe(III)) oxyhydroxides commonly precipitate at neutral pH and in highly oxygenated conditions in waterways receiving acid mine drainage, degrading stream benthic communities by smothering of habitat, primary producers, and aquatic invertebrates. Stream mesocosms were used to expose naturally colonized benthic communities to a gradient of ferric Fe (0-15 mg/L) for 14 days to estimate the effects of Fe precipitates on primary production, larval and emerging adult aquatic insects, and the macroinvertebrate community structure. Community composition was significantly altered at concentrations near or below the US Environmental Protection Agency chronic Fe criterion (1.0 mg/L). Iron exposure significantly decreased larval and emerging adult abundances of Baetidae (mayfly) and Chironomidae (Diptera); however, while Simuliidae (Diptera) larvae were not reduced by the Fe treatments, abundance of emerged adults significantly decreased. Iron substantially decreased the colonization biomass of green algae and diatoms, with estimated EC20 values well below the Fe criterion. In contrast, cyanobacteria were stimulated with increasing Fe concentration. By integrating environmentally realistic exposure conditions to native benthic communities that have complex structural and functional responses, the ability to predict the effects of Fe in the field is improved. Traditional toxicity testing methodologies were not developed to evaluate indirect effects of contaminants, and modernized approaches such as community mesocosm experiments better characterize and predict responses in aquatic ecosystems outside the laboratory. Therefore, the development of water quality standards would benefit by including mesocosm testing results.