We identify several common characteristics of urbanized watersheds in the USA and discuss some of the challenges frequently encountered with urban stream restoration projects. These projects necessarily differ in many respects compared with watershed restoration practices employed in less developed locations. The stream condition, common in urbanized watersheds, is not easily rehabilitated even with more contemporary bioengineering practices replacing traditional ‘harder’ engineering practices. Major challenges for restoration projects in these settings include (i) the increased efficiency with which runoff and pollutants are routed into streams by means of impervious surface cover and storm drains; (ii) a poor understanding of sediment sources and transport relations; and (iii) the general paucity of documented projects with sufficient long‐term monitoring to guide ongoing and future efforts. To succeed in this field may require (i) a more complete database of project characteristics that can be used for adaptive management, (ii) a broader watershed‐scale restoration approach, and (iii) an improved understanding of geomorphologic and ecological processes relevant to urban streams. Recent examples of urban stream projects in the USA highlight the diversity of site‐specific circumstances and considerations that accompany each project.