According to several recent studies using standard acute Hyalella azteca sediment bioassays, increased pyrethroid use in urban and suburban regions in California has resulted in the accumulation of toxic concentrations of pyrethroids in sediments of area streams and estuaries. However, a critical review of the literature indicates that this is likely an overestimation of environmental risk. Hyalella azteca is consistently the most susceptible organism to both aqueous and sediment-associated pyrethroid exposures when compared to a suite of other aquatic taxa. In some cases, H. azteca LC50 values are less than the community HC10 values, suggesting that the amphipod is an overly conservative model for community- or ecosystem-level impacts of sediment-associated pyrethroids. Further, as a model for responses of field populations of H. azteca, the laboratory bioassays considerably overestimate exposure, because the amphipod is more appropriately characterized as an epibenthic organism, not a true sediment dweller; H. azteca preferentially inhabit aquatic macrophytes, periphyton mats, and leaf litter, which drastically reduces their exposure to contaminated sediments. Sediment-bound pyrethroids are transported via downstream washing of fine particulates resulting in longer range transport but also more efficient sequestration of the chemical. In addition, site-specific variables such as sediment organic carbon content, grain size, temperature, and microbial activity alter pyrethroid bioavailability, degradation, and toxicity on a microhabitat scale. The type and source of the carbon in particular, influences the pyrethroid sequestering ability of sediments. The resulting irregular distribution of pyrethroids in stream sediments suggests that sufficient nonimpacted habitat may exist as refugia for resident sediment-dwelling organisms for rapid recolonization to occur. Given these factors, we argue that the amphipod model provides, at best, a screening level assessment of pyrethroid impacts and can correctly identify those sediments not toxic to benthic organisms but cannot accurately predict where sediments will be toxic.