With the current loss of biodiversity and threats to freshwater ecosystems, it is crucial to identify hot-spots of biodiversity and on which spatial scale they can be resolved. Conservation and management of these important ecosystems needs insight into whether most of the regional biodiversity (i.e. γ-diversity) can be found locally (i.e. high α-diversity) or whether it is distributed across the region (i.e. high β-diversity). Biodiversity patterns of benthic macroinvertebrates and diatoms were studied in 30 headwater streams in five Swedish catchments by comparing the relative contribution of α- and β-diversity to γ-diversity between two levels of stream habitat hierarchy (catchment and region level). The relationship between species community structure and local environmental factors was also assessed. Our results show that both α- and β-diversity made a significant contribution to γ-diversity. β-diversity remained relatively constant between the two levels of habitat hierarchy even though local environmental control of the biota decreased from the catchment to the region level. To capture most of headwater γ-diversity, management should therefore target sites that are locally diverse, but at the same time select sites so that β-diversity is maximized. As environmental control of the biota peaked at the catchment level, the conservation of headwater stream diversity is likely to be most effective when management targets environmental conditions across multiple local sites within relatively small catchments.