1. Streams and their riparian zones are connected by spatial flows of organic matter, and constitute a model example of a meta-ecosystem. Fluxes of leaf litter from the riparian zone to the stream are a major energy source in stream food webs. Leaf litter can enter the stream vertically, falling from the tree and into the stream, or laterally, washing into the stream after a period of exposure in the terrestrial ecosystem. The latter can contribute up to 23% to the total amount of litterfall entering streams. 2. To determine if decomposition, microbial and invertebrate colonization of lateral litter inputs are similar to those of vertical inputs, we assessed leaf decomposition of alder, poplar and a 1:1 mixture of the two species in three scenarios across a gradient of terrestrial:aquatic exposures. 3. Overall decomposition was explained by a negative exponential model and decreased with the increase in the period of terrestrial exposure in all cases. Invertebrate colonization tended to decrease with the increase in the period of terrestrial exposure, but total invertebrate richness and biomass were more affected by litter type than by the exposure scenario, attaining higher values in the mixture than in the species alone. 4. As the length of exposure in the terrestrial ecosystem increased, in-stream decomposition rates of leaf litter decreased. Comparing leaf species treatments, alder decomposition rates were faster than poplar and the alder-poplar mixture. 5. The richness of the aquatic hyphomycete community colonizing leaf litter after submergence decreased and sporulation rates were strongly inhibited with an increasing terrestrial exposure period. While fungi colonizing leaf litter exposed only in the stream invested in rapid reproduction, fungi colonizing litter with prior terrestrial exposure built up more biomass. 6. We conclude that the path taken by the litter fluxes has important effects on the functioning of the receiving ecosystem. Studies relying only on the fate of freshly abscissed leaf litter (vertical inputs) may not present a complete picture of the decomposition process in streams and may have been overestimating the overall richness and reproductive activity of the aquatic hyphomycetes colonizing leaf litter.