The reference-condition approach to bioassessment often uses the observed/expected (O/E) ratio to indicate anthropogenic alteration of aquatic macroinvertebrates, fish, or periphyton assemblages. Given a list of taxa found at ≥1 minimally disturbed reference sites, E is the number of those taxa that would expected in a sampled assemblage if the sampled stream were in reference condition, and O is the number of those taxa observed in the sample. An O/E value significantly <1.0 indicates that a stream has lost taxa relative to its reference-condition expectation, possibly because of anthropogenic stress. However, the O/E index can be insensitive to stress-induced shifts in taxonomic composition that leave assemblage richness unchanged. As an alternative to O/E, I propose using BC, an adaptation of Bray–Curtis distance, to measure the compositional dissimilarity between an observed and expected assemblage directly. I compared the performance of BC and O/E at 5685 stream and lake sites throughout the contiguous 48 states of the US using 1 of 10 River Invertebrate Prediction and Classification system (RIVPACS)-type models to predict expected assemblages. Percentages of independently determined nonreference sites that were declared to be nonreference by BC exceeded the percentage declared to be nonreference by O/E by an average of 6 to 16 percentage points, depending on whether the 2 indices included low-probability taxa, whether a 1-sided or 2-sided O/E criterion was used to declare nonreference, and whether predictive or null models were used to predict expected assemblages. Correlations between BC scores and anthropogenic stressor variables were stronger than correlations between O/E scores and anthropogenic stressor variables in 18 of 25 cases. In contrast to O/E, BC can include low-probability taxa without reducing its power to detect nonreference conditions.