Although excessive loading of fine sediments into rivers is well known to degrade salmonid spawning habitat, its effects on rearing juveniles have been unclear. We experimentally manipulated fine bed sediment in a northern California river and examined responses of juvenile salmonids and the food webs supporting them. Increasing concentrations of deposited fine sediment decreased growth and survival of juvenile steelhead trout. These declines were associated with a shift in invertebrates toward burrowing taxa unavailable as prey and with increased steelhead activity and injury at higher levels of fine sediment. The linear relationship between deposited fine sediment and juvenile steelhead growth suggests that there is no threshold below which exacerbation of fine‐sediment delivery and storage in gravel bedded rivers will be harmless, but also that any reduction could produce immediate benefits for salmonid restoration.