Watershed urbanization alters hydrologic, geomorphic, and chemical properties of stream ecosystems and decreases water and habitat quality for stream fauna. The resulting loss of insect diversity from urban streams and the mechanisms resulting from in-stream habitat degradation are well documented. In this study, I focus on how urbanized terrestrial landscapes contribute to diversity loss from stream insect communities. Characteristics of fragmented urban landscapes likely increase mortality, reduce reproduction, and block dispersal by adult stream insects, which can contribute to reduced diversity. I compared the adult caddisfly assemblage among 4 urban and 4 rural headwater streams and found no difference in abundance but lower taxa richness at urban than rural headwaters. Poor in-stream and terrestrial environmental conditions likely caused decreased adult diversity at urban headwaters. I expanded this study by comparing adult and larval assemblages residing in the same 8 headwater streams. Patterns of larval and adult taxa richness, assemblage composition, and urban landscape structure at individual streams suggested that constrained dispersal through urban landscapes (a regional process) and poor environmental conditions in the stream (a local process) both contributed to larval diversity loss from urban headwaters. I also compared flight morphological characteristics of 2 caddisfly species restricted to rural headwaters to 4 species that commonly immigrated to urban headwaters. Wing length and wing aspect ratio did not differ between these 2 groups, but species specific differences for both measures indicated that flight ability may have supported immigration to urban headwaters for certain species. Finally, I used multimodel inference testing to determine what combination of geographic distance, environmental dissimilarity, and land use between streams best explained patterns of taxonomic dissimilarity between in-stream insect communities within 4 Maryland watersheds. All three variables together, based on Euclidean geographic distance, provided the best model fit and supported the hypothesis that regional and local processes structure stream insect communities simultaneously. The overall conclusion from my work was that site specific characteristics of terrestrial urban landscapes caused species specific constraints on adult insect migration that contributed to larval diversity loss from urban streams simultaneously with poor in-stream habitat and water quality.