Small headwater streams are abundant components of the riverine landscape where critical biochemical processes occur that provide clean water, energy, and nutrients to downstream reaches. Disturbance to these systems as a result of human land use has the potential to affect downstream health. Rates of metabolism and organic matter processing were measured in 22 small forested headwater streams in 2 regions of Tasmania, Australia, to evaluate the effects of forestry disturbance. Twelve of these streams had been subjected to recent clearfell-burn-and-sow (CBS) harvest. Benthic metabolism was measured in small in situ chambers (production ranged from <0.001 to 21.845 mg C m⁻² h⁻¹ and respiration from <0.001 to 4.976 mg C m⁻² h⁻¹), whole-system metabolism was estimated based on relative habitat abundance (gross primary production ranged from <0.001 to 0.297 g C m⁻² d⁻¹ and daily respiration from 0.003 to 0.072 g C m⁻² d⁻¹). Algal growth potential was measured on nutrient diffusing pots (chlorophyll a ranged from <1.0 to 40.1 mg/m²), and cellulose decomposition potential was assessed with a cotton-strip assay (cotton tensile strength loss ranged from 17.8% to 38.3% in 28 d). Sometimes an increase in the variability of response is a consequence of disturbance, but in our study, the difference between forested streams and clearcut streams was a significant increase in the mean values of all functional variables. The degree of response depended on the underlying geology (broad-scale spatial variability) of the streams. Current management practices for small headwater streams in Tasmania do not protect instream processes from forestry disturbance in the short-term (i.e., 2–5 y), and we suggest that an investigation of long-term response is warranted.