•Evaluate environmental land use conflicts (LUC) in rural watersheds.•Investigate the ecological quality of surface water in LUC areas.•Characterize the structure of macroinvertebrate communities within LUC areas.•Assess the overall impact of LUC on the riverine ecosystem.•Propose measures of soil conservation and water protection to mitigate impacts of LUC. Starting from a diagnosis of areas with different environmental land use conflicts located in various rural sub-basins of the River Sordo basin (northern Portugal), the present study analyzed the ecological quality of surface water in small mountain streams to establish a relationship between land use, water and aquatic biota. Environmental land use conflicts were set up on the basis of land use and land capability maps, coded as follows: 1 – agriculture, 2 – pasture, 3 – pasture/forest, and 4 – forest. Land capability was assessed by the ruggedness number methodology (RN). The difference between the codes of capability and use defines a conflict class, where a negative or null value means no conflict and a positive value means class i conflict. Within and without the conflict areas, ecological quality of surface water was evaluated by the metrics EPT taxa, IPtIN index, diversity of Shannon–Wiener and Evenness index. Macroinvertebrate communities are strongly correlated to conflict classes, because sites without (reference sites) or with minor physicochemical and hydromorphological degradation (Class 1) presented high diversity, evenness, EPT taxa and IPtIN index, while more impacted sites (Class 2) presented an ecological status not fulfilling the demands of the European Union Water Framework Directive (2000/60). The present study indicates a significant impact of land use on water quality which has straight influence on the distribution of biota, emphasizing the key role of riparian vegetation in the conservation of aquatic ecosystems. The highest impacts on macroinvertebrate assemblages were associated with changes in water quality parameters such as temperature, oxygen saturation (%), turbidity, total suspended solids (TSS), nitrates, phosphates and sulphates, conductivity and dissolved oxygen, as well as hydromorphological alterations driven by the total absence of riparian vegetation as a consequence of terrace building, agriculture and the resectioning/reinforcement of the banks associated with the culture of vine. Macroinvertebrates proved reliable to distinguish conflict classes and separate seasons. The main conservation measures required to improve the conflict areas in the short and medium term mainly include the adoption of agroforestry practices as these not only improve the quality of water and soil, maintaining land resources over a long period of use, but also brings many benefits to the landowner.