Changes in epilithic algal communities colonizing introduced substrata were determined in a stream polluted with oil refinery effluent at Digboi (Assam, India). The number of algal taxa was reduced but the growth of blue-green algae, particularly two species of Oscillatoria, was encouraged. Epilithic biomass (as chlorophyll a) also declined at polluted stations. The algal community of the upstream station was markedly different from the community occurring just after the confluence of effluent; however, the differences were gradually reduced downstream, indicating improvement in water quality. Of the various criteria tested for possible relationships with the level of pollutants, species richness, Shannon diversity and biomass showed significant relationships. The study demonstrates the usefulness of algal criteria for monitoring oil pollution in running waters.