Urban settlements significantly impact ecosystem function by fragmenting and degrading natural habitats, simplifying species composition, disrupting hydrological systems, and modifying energy flows and nutrient cycles. Urban ecological scholars have illustrated that human activities have a profound effect on ecosystem functions at the landscape scale; however, little is known about the affect of localized human activities as they affect the ecological processes. The aim of this paper is to better understand how localized socio-demographics conditions, and human activities along riparian corridors affect the biological condition of stream systems. By examining land cover patterns at the riparian and watershed scales, we assess the role of socio-demographic characteristics, and human behaviors and preferences on macroinvertebrate assemblages (measured as a Benthic Index of Biotic Integrity) in the Puget Sound lowland. Specifically, we address three research questions: (1) what is the relationship between stated and observed preference for riparian vegetation; (2) how do socio-demographics and human preferences at the local scale affect in-stream conditions; and (3) what thresholds at the local scale regulate the effects of human activities on in-stream conditions? We address these questions in four steps. First, during the Fall of 2003 and 2004 we collected macroinvertebrate data from 46 sites (7 streams) ranging from urban to rural in the Puget Sound lowland. Second, we administered a stated preference survey to streamside residents during the Spring of 2004. Third, we quantified the land cover conditions using Fragstats spatial analysis software and a geographic information system. Finally, we analyzed our data using parametric and non-parametric regression models. Our results illustrate that revealed preference explains little to nothing about stream conditions in urban areas, but has considerable explanatory value in rural and urbanizing stream segments. In addition, our results suggest that socio-ecological coupling may play a critical role in regulating ecosystem functions at localized areas.