1. The relationships between three habitat scales and lotic invertebrate species composition were investigated for the 15 540 km2 Yakima River basin in south‐central Washington, U.S.A. 2. The three spatial scales were sample (the sampled riffle), reach (a length of ten–twenty stream widths) and segment (a length of stream of nearly uniform slope and valley form having no change in stream order). 3. Physical variables were highly correlated between scales and expressed a relationship between altitude, basin form and small‐scale physical structure. 4. Multiple discriminant function analyses indicated that segment‐ and reach‐scale variables discriminated among species‐defined groups better than sample‐scale variables. 5. Species composition varied along a complex altitudinal gradient of changing basin form and resultant land use. 6. There was no clear relationship between species richness and altitude on a site basis. However, when viewed at the basin scale, maximum richness was observed at the transition between montane and valley sites.