Two difficult decisions in the design of any bioassessment program based on stream macroinvertebrates are the number and types of habitats that should be sampled and the taxonomic level to which specimens should be identified. We used a large data set from biomonitoring of streams in the greater Sydney region, New South Wales, Australia, to compare bioassessment results obtained with an average-score-per-taxon type of biotic index among several habitats and between the taxonomic levels of family and genus. We evaluated the sensitivity of family- and genus-level indices calculated for 5 habitats (edges of pools, rocks in pools, riffles, aquatic macrophytes, and submerged wood) by considering relationships to chemical and microbial indicators of anthropogenic stress and capacity to distinguish sites affected by human activities from reference sites. Samples from rocks in pools did best on both criteria, and samples from edges of pools also did well. Genus-level index scores were slightly more strongly correlated with environmental variables than were family-level index scores, but taxonomic resolution had virtually no average effect on the degree to which samples from test sites differed from reference status, even though tolerance values for genera differed widely within some families. We attributed the weak effect of greater taxonomic resolution to the small number of identified genera in most families and the fact that many specimens could be identified to family but not to genus. The cost of discrete sampling from multiple habitats might sometimes be justified by its potential to detect habitat-specific impacts at particular sites. However, we conclude that it might be more cost-effective in broad-scale surveys to restrict sampling to the edges of pools, a habitat that occurs widely, or to consider assessment using composites of samples across multiple habitats. The small difference in sensitivity between the family- and genus-level indices suggests that, given its greater cost, bioassessment with fine-level taxonomy may be justified only in special circumstances, such as detection of subtle impacts. A tiered approach, in which only those families with wide intrafamilial variation in tolerance are identified to finer levels, is likely to be more cost-effective than identifying all taxa with fine-level resolution.