1. Habitat restoration is increasingly undertaken in degraded streams and rivers to help improve biodiversity and ecosystem functioning. Follow-up assessments focused on outcomes for biodiversity have often found scant evidence for recovery, thus raising concerns about the efficacy of habitat restoration for improving ecological integrity. However, responses of other ecological variables, such as ecosystem process rates and the functional trait composition of biological assemblages, have been little assessed. 2. We assessed how the restoration of habitat heterogeneity affected multiple functional parameters in 20 boreal stream reaches encompassing both more and less extensively restored sites, as well as channelised and natural reference sites. We further assessed relationships between our parameters and a fluvial geomorphic measure of habitat heterogeneity. 3. Leaf decomposition was positively related to habitat heterogeneity. This was associated with shifts in the functional composition of detritivore assemblages, with the most obligate litter consumers more prominent in reaches showing higher habitat heterogeneity. The deposition of fine particulate organic matter was consistently higher in restored than channelised sites, and was positively related to the heterogeneity gradient. Algal biomass accrual per unit area did not vary either with restoration or the heterogeneity gradient. 4. Synthesis and applications: Our findings demonstrate that restoration of river habitat heterogeneity can enhance retention and decomposition of organic matter, key ecosystem processes underpinning ecosystem functioning and service delivery. Significantly, enhanced litter decomposition was linked with a change in the functional composition rather than diversity of detritivore assemblages. Future evaluation of the success of habitat restorations should incorporate quantification of ecosystem processes and the functional traits of biota, in addition to measures of fluvial geomorphology and the more traditional biotic metrics, to facilitate a more comprehensive and mechanistic assessment of ecological responses.