It is expected that catchment-scale forest restoration will progressively restore tropical streams by enhancing habitat, channel structure and, ultimately, the recovery of ecosystem processes such as decomposition, which in turn support the restoration of key ecological functions, including nutrient cycling, habitat provision, and energy flow. To test this hypothesis, we assessed changes in stream habitat and water quality, invertebrate’s composition, leaf litter decomposition, periphyton and sediment dynamics along a gradient of forest restoration in catchments previously dominated by pasturelands. We sampled 30 catchments (dry season/2023) representing six forest restoration stages (N=5), ranging from pastureland to mature forest. In each stream, water and habitat quality was assessed once. Coarse litterbags with Guazuma ulmifolia leaves were installed (˜45 days) to measure decomposition. At the end of the experiment, invertebrates colonizing the litterbags were assessed. Acetate sheets and turf matts were used to measure periphyton biomass and chlorophyll-a, and sediments, respectively. The results revealed lower water temperatures and nutrient concentrations, and higher stream habitat diversity in catchments covered by remnant and old restored forests. Also, leaflitter decomposition rates were higher, aligning with shredders abundance and biomass. In contrast, chlorophyll-a and periphyton biomass were lower, as were sediment deposition. Overall, we found a gradient of recovery of both stream ecosystem structure and processes. Water quality recovered first, while decomposition rates were only comparable to the control in catchments with over 25 years of forest restoration. By monitoring stream structure and processes, we could highlight the benefits and limitations of forest restoration on stream health. In conclusion, forest restoration benefits stream ecosystems, but with a gradual response from water quality improvement to the recovery of ecosystem processes.