Riparian vegetation is closely connected to stream food webs through input of leaf detritus as a primary energy supply, and therefore, any alteration of plant diversity may influence aquatic ecosystem functioning. We measured leaf litter breakdown rate and associated biological parameters in mesh bags in eight headwater streams bordered either with mixed deciduous forest or with beech forest. The variety of leaf litter types in mixed forest results in higher food quality for large-particle invertebrate detritivores ('shredders') than in beech forest, which is dominated by a single leaf species of low quality. Breakdown rate of low quality (oak) leaf litter in coarse mesh bags was lower in beech forest streams than in mixed forest streams, a consequence of lower shredder biomass. In contrast, high quality (alder) leaf litter broke down at similar rates in both stream categories as a result of similar shredder biomass in coarse mesh bags. Microbial breakdown rate of oak and alder leaves, determined in fine mesh bags, did not differ between the stream categories. We found however aquatic hyphomycete species richness on leaf litter to positively co-vary with riparian plant species richness. Fungal species richness may enhance leaf litter breakdown rate through positive effects on resource quality for shredders. A feeding experiment established a positive relationship between fungal species richness per se and leaf litter consumption rate by an amphipod shredder (Gammarus fossarum). Our results show therefore that plant species richness may indirectly govern ecosystem functioning through complex trophic interactions. Integrating microbial diversity and trophic dynamics would considerably improve the prediction of the consequences of species loss.