Early nineties of previous century aquatic biodiversity was low in many West-European countries as a consequence of pollution, hydromorphological degradation and a lack of sound environmental legislation. Since the early 2000s and the implementation of the European Water Framework Directive a big step forward has been made to achieve a good ecological status of surface waters in Europe. However, to date little is known about the response of biological life in small lowland streams on improving conditions for both water quality and habitat diversity. In this study, we assessed possible relationships between chemical water quality and aquatic biodiversity of the Zwalm River basin (Belgium) using a dataset of long-term measurements of the chemical and biological water quality. Specifically, we wanted to know 1) the evolution in chemical and biological water quality over the last three decades and 2) if an improvement in chemical water quality was reflected in the macroinvertebrate and fish diversity. We found that there was indeed a significant improvement in the chemical water quality thanks to the installation of wastewater treatment plants and river basin management plans. Shortly after this improvement in chemical water quality, an increase in the number and abundance of pollution sensitive macroinvertebrate taxa was observed, which was consequently also seen in the biotic index score, based on macroinvertebrates. Despite a limited change in community composition observed for fish, no significant increase in diversity, or in the biotic index score of fish could be found. Currently, a stagnation of the improving water quality is observed. Hydromorphological restoration and free fish migration remain important key factors to improve diversity of macroinvertebrates and fish species. Based on the results of this study, we provide guidelines (for example restoration of spawning beds, decrease diffuse pollution from agriculture) to optimize the investments made in river restoration and to achieve the good ecological status by 2027 as defined by the European Water Framework Directive.