Biodiversity and ecosystem‐functioning theory suggest that litter mixtures composed of dissimilar leaf species can enhance decomposition due to species trait complementarity. Here we created a continuous gradient of litter chemistry trait variability within species mixtures to assess effects of litter dissimilarity on three related processes in a natural stream: litter decomposition, fungal biomass accrual in the litter, and nitrogen and phosphorus immobilization. Litter from a pool of eight leaf species was analyzed for chemistry traits affecting decomposition (lignin, nitrogen, and phosphorus) and assembled in all of the 28 possible two‐species combinations. Litter dissimilarity was characterized in terms of a range of trait‐diversity measures, using Euclidean and Gower distances and dendrogram‐based indices. We found large differences in decomposition rates among leaf species, but no significant relationships between decomposition rate of individual leaf species and litter trait dissimilarity, irrespective of whether decomposition was mediated by microbes alone or by both microbes and litter‐consuming invertebrates. Likewise, no effects of trait dissimilarity emerged on either fungal biomass accrual or changes during decomposition of nitrogen or phosphorus concentrations in individual leaf species. In line with recent meta‐analyses, these results provide support for the contention that litter diversity effects on decomposition, at least in streams, are less pronounced than effects on terrestrial primary productivity.