Large-scale surface mining in southern West Virginia significantly alters headwater stream networks. The extent to which mining interacts with other stressors to determine physical, chemical, and biological conditions in aquatic systems downstream is unclear. We conducted a watershed-scale assessment of Pigeon Creek, an intensively mined watershed of the Tug Fork drainage in Mingo County, West Virginia. Our objectives were to: 1) develop landscape-based indicators of mining and residential development, 2) quantify the interactive effects of mining and residential development on in-stream conditions, and 3) identify landscape-based thresholds above which biological impairment occurs in this watershed. Macroinvertebrate community structure was negatively correlated with intensity of mining and residential development. Correlation analysis and partial Mantel tests indicated that mining (% of total subwatershed area) caused acute changes in water chemistry (r = 0.55–0.91), whereas residential development (parcel density) strongly affected both physical habitat (r = 0.59–0.81) and macroinvertebrate community structure (r = 0.59–0.93). The combined effects of mining and development on in-stream biotic conditions were additive. Sites affected by equivalent levels of both stressors had lower Ephemeroptera, Plecoptera, Trichoptera richness than sites affected by either stressor alone. Biological impairment thresholds occurred at ~25% total mining (equivalent to a specific conductance of ~250 µS/cm) and at parcel densities of ~5 and 14 parcels/km². Our results provide a tool that can be used to predict downstream ecological response to proposed mining given pre-existing watershed conditions. Our study suggests that effective management of impacts from new mine development must address nonmining-related impacts in this region.