Stream macroinvertebrate assemblages are shaped by natural and human‐related factors that operate through complex hierarchical pathways. Quantifying these relationships can provide additional insights into stream ecological assessment. We applied a structural equation modeling framework to evaluate hypothesized pathways by which watershed, riparian, and in‐stream factors affect benthic macroinvertebrate condition in the Western Mountains (WMT) and Xeric (XER) ecoregions in the United States. We developed a conceptual model grounded in theory, empirical evidence, and expert opinion to evaluate the following hypotheses: (1) macroinvertebrate assemblages are primarily driven by proximal, in‐stream factors (e.g., water quality and physical habitat); (2) anthropogenic land uses affect macroinvertebrates indirectly by altering in‐stream characteristics; and (3) riparian vegetation cover attenuates land use effects. We tested our model separately on three measures of benthic macroinvertebrate assemblage condition: ratio of observed‐to‐expected taxonomic richness (O/E); a multimetric index (MMI); and richness of Ephemeroptera, Plecoptera, and Trichoptera taxa (EPT). In the WMT, site‐level riparian cover, in‐stream physical habitat (relative bed stability), and water chemistry (total nitrogen) were the top three predictors of macroinvertebrate assemblages, each having over two times the magnitude of effect on macroinvertebrates compared with watershed‐level predictors. In the arid XER, annual precipitation and stream flow characteristics were top predictors of macroinvertebrate assemblages and had similar magnitudes of effect as in‐stream water chemistry. Path analyses revealed that land use activities in the watershed and at the stream site degraded macroinvertebrate assemblages indirectly by altering relative bed stability, water quality, and riparian cover/complexity. Increased riparian cover was associated with greater macroinvertebrate condition by reducing land use impacts on stream flow, streambed substrate, and water quality, but the pathways differed among ecoregions. In the WMT, site‐level riparian cover affected macroinvertebrate assemblages partly through indirect pathways associated with greater streambed stability and reduced total nitrogen concentrations. In contrast, in the XER, watershed‐level riparian cover affected macroinvertebrate assemblages through greater specific stream power. Identifying the relative effects of and pathways by which natural and anthropogenic factors affect macroinvertebrates can serve as a framework for prioritizing management and conservation efforts.