Increased residential development along small mountain streams within pine forests in central Arizona has surged in the last 20 years and presents a potential threat to riparian plant communities on these small mountain streams because it can alter the nature of streamflow from perennial to ephemeral. The change in streamflow increases water stress on riparian plants along these streams. Cultural activities associated with residential development that affect streamflow are water diversions, groundwater pumping, and changes in land use. Measurements of tree densities and stand composition of Arizona alder ( Alnus oblongifolia) and box elder ( Acer negundo) showed that perennial stream reaches had greater tree densities in all diameter classes, compared with ephemeral stream reaches where small-diameter trees were absent. Xylem water-potential measurements decreased more rapidly on trees occupying ephemeral stream reaches than on trees of comparable reaches of perennial streams over time during the summer. The increase in water stress in trees growing along ephemeral stream reaches may be responsible for the lower plant densities and lack of seedling establishment measured. Trout populations also declined when perennial streamflow changed to ephemeral.