The effects of measurement errors on biological inferences of stream temperature and bedded fine sediment were investigated. Single variable and multivariate logistic regression models were used to relate the occurrences of different macroinvertebrate genera and observed temperature and fine sediment. Next, a simulation and extrapolation method (SIMEX) was used to adjust regression model coefficients for the effects of measurement errors in the temperature and fine-sediment observations. It was assumed that the persistence of different stream organisms was related to long-term average environmental conditions, so measurement error in this analysis was interpreted broadly as including all the variability associated with estimating long-term averages from single measurements. On average, correcting for measurement error narrowed the breadth of genus–environment relationships and shifted optimum values toward the mean of the observations. Accounting for measurement error also improved the predictive accuracy of some of the inference models. Inferences of temperature based on single-variable SIMEX models were 28% more accurate than inferences based on naive models that used uncorrected observations. However, inferences of fine sediment based on single-variable SIMEX models were only slightly more accurate than inferences based on naive models. Multivariate models, in which both stream temperature and fine sediment were modeled simultaneously, exhibited the strongest improvement in predictive performance when measurement error was taken into account. The accuracy of temperature inferences improved by 39%, whereas fine-sediment inferences improved by 8%.