Mitigation of adverse effects of channel incision and the loss of alluvial bed substrate on the ecosystems of mountain watercourses downstream from check dams requires effective sediment entrapment in the incised channels. We examined changes in the ecosystem of mountainous Krzczonówka Stream, Polish Carpathians, resulting from lowering of a high check dam and installation of several block ramps in the downstream reach. Physical habitats, benthic macroinvertebrates and fish were examined in 10 cross-sections downstream from the dam over 5 years of the restoration project. Halfway into the restoration project, sediments flushed out by a flood from the reservoir of the lowered check dam were entrapped by block ramps, re-establishing alluvial bed substrate in the incised channel. Increases in bed elevation, bankfull channel width and near-bed flow velocity and a reduction in bankfull channel depth significantly changed physical habitat conditions. A significant increase in taxonomic richness of benthic macroinvertebrates was inversely related to a change in bankfull channel depth in given cross-sections. Fish species richness and the abundance of subadult and adult fish individuals did not increase, but the structure of fish community changed towards more natural one. Assessments of restoration effects on ecological stream quality performed with the invertebrate-based BMWP-PL index and the European Fish Index yielded different results, with the former indicating a significant improvement and the latter a lack of quality change. A combination of the applied measures appears useful in restoring the ecosystem of incised mountain streams, though effects on different groups of aquatic fauna may vary.