Leaf litter decomposition is an essential function in forest ecosystems, and riparian areas may contribute to faster rates of litter mass loss due to higher moisture and nutrient levels in riparian than upland soils. We experimentally tested whether mass loss of red alder leaf litter was (1) greater closer to the stream than further away and (2) increased by nutrient and water additions in riparian habitat near four headwater streams in southwestern British Columbia. We set up blocks of nine transects extending from the bankfull edge of the stream into upland habitat. Leaf litter bags were placed at 1, 5, 10, 20, and 40 m from the stream along each transect, and data loggers recorded ambient air temperature and relative humidity at each distance. Litterbags received either water or fertilizer additions, both, or neither along each transect. Four trials were run which varied in duration (3 months to 1 yr). Relative humidity was on average 2.6% higher, air temperature 0.25°C lower, and vapor pressure deficit 0.14 kPa lower at 1 m from the stream compared to distances further upland. The addition of water significantly increased litter mass loss by 0.14 g (4%) on average than control litterbags. The addition of fertilizer was a significant factor in some trials but not in others, and its effect on mass loss varied. Although distance from the stream was not a significant parameter in the averaged models for each trial, it was in several top models. We conclude that (1) riparian communities within 1 m of the stream experience a different microclimate during the warmer, drier summer than those communities further upland, though this was not generally reflected in alder mass loss rates, and (2) water was a primary limiting factor to alder leaf mass loss in our study sites.