Headwater streams are sensitive ecosystems due to their small size, making them vulnerable to erosion, sedimentation, and changes in flow and habitat complexity linked to anthropogenic activities and climate change. Understanding terrestrial-aquatic connections in stream systems requires examining how factors such as energy inputs, nutrient availability, and macroinvertebrate communities interact across different environments. We investigated how changes in land cover along an elevation gradient influence taxonomic and functional diversity in the non-perennial stream systems located in California’s arid climate (n = 12 sites). We predicted that macroinvertebrate taxonomic and functional diversity will increase with an increase in elevation, along with an increase in riparian plant diversity. In addition, the macroinvertebrate community will be dominated by the shredder and collector–gatherer functional feeding groups (FFG) in the higher elevation stream sites; however, the collector–filterer and scraper–grazer FFG will dominate the macroinvertebrate community in the low elevation, valley stream sites. A Surber sampler was used to collect aquatic macroinvertebrate samples, colorimetric methods were used to determine nutrient concentrations, and the total dry mass of allochthonous materials was measured. The riparian vegetation was surveyed and overarching canopy cover above the stream was measured. Preliminary data suggests that collector-gatherers (Chironomidae and Baetidae) and collector-filterers (Simuliidae) larvae dominated the macroinvertebrate communities (>70%) in the high elevation sites; however, collector-filterers (Simuliidae) and collector-gatherers (Baetidae) larvae dominated the low elevation sites. In addition, macroinvertebrate taxonomic and functional diversity was 2 x greater at high elevation sites compared to low elevation sites. High elevation, mountainous sites were dominated by shrubs and trees where water flow is perennial; however, low elevation, grassland sites were dominated by grasses with sparse woody vegetation where water flow is non-perennial. Understanding how elevation and land cover influence freshwater streams will aid in effective management and restoration efforts in arid climates.