Catchment land use of streams can cause deterioration of the stream ecosystems. Studies on the impact of land use on water quality and invertebrate assemblages in tropical streams are currently less common than studies in temperate regions. In the current study, we conducted a field survey on stream invertebrates and habitat characteristics in 23 streams with different land use conditions in Yogyakarta Province, Java Island, Indonesia. Relationships among catchment characteristics, habitat characteristics, and invertebrate assemblages were analyzed to elucidate the importance of land use and water quality in determining invertebrate assemblages. The analyses, using generalized linear models, showed that the relative area of urban land use of the catchment was strongly and positively related to the nutrient concentration of stream water and negatively related to the taxonomic richness of whole invertebrate assemblages and intolerant taxa. Furthermore, the richness metrics were low in streams with high nutrient concentrations, particularly PO4-P. The biplot of nonmetric multidimensional scaling showed that there was a gradient in community structure along the tolerance to water pollution that occurred in urban streams. These results collectively suggest that urban land use, not agricultural use, seemed to be a predominant factor causing nutrient enrichment in stream water and low invertebrate diversity through the exclusion of intolerant taxa in Indonesian streams whose catchments are exposed to rapid urbanization. We suggest that the impact of agricultural wastewater on stream water quality is concealed by the strong impact of urbanization when we consider that farming methods are, in general, not intensive in Indonesia, and that advanced wastewater treatment systems have not been widely introduced. Our results strongly support the development of sewage treatment as an effective solution for restoring tropical stream ecosystems.