Dam removal is often proposed as way to restore ecological integrity to rivers and streams, but ecological responses to dam removals are poorly understood, especially for downstream benthic communities. We examined the responses of benthic macroinvertebrate and algal assemblages in downstream reaches to the removal of a small, run-of-river dam on Manatawny Creek, Pennsylvania. Benthic macroinvertebrates, algae, and habitat characteristics were monitored upstream and downstream of the dam for 4 mo before removal, 3 mo after partial removal (i.e., when the impoundment was largely eliminated but sediment remained trapped behind the remaining structure), and 12 mo after complete dam removal. Macroinvertebrate density, algal biomass, and diatom species richness declined significantly downstream of the dam following complete dam removal, but overall assemblage structure (as indicated by Nonmetric Multidimensional Scaling ordinations) downstream remained similar to upstream control sites throughout the study for both invertebrates and diatoms. Downstream impacts occurred only after the dam structure had been completely removed and sediments had been transported downstream from the former impoundment by high flows. Biotic impacts persisted for the duration of the study (12 mo after complete removal). Our results and other studies of dam removal suggest that downstream sedimentation following dam removal can reduce densities of macroinvertebrates and benthic algae and may reduce benthic diversity, but for small dams such impacts may be relatively minor and will usually be temporary.