Litter breakdown in the streambed is an important pathway in organic carbon cycling and energy transfer in the biosphere that is mediated by a wide range of streambed organisms. However, most research on litter breakdown to date has focused on a small fraction of the taxa that drive it (e.g. microbial versus macroinvertebrate mediated breakdown) and has been limited to the benthic zone (BZ). Despite the importance of the hyporheic zone (HZ) as a bioreactor, little is known about what, or who, mediates litter breakdown in this compartment and whether breakdown rates differ between the BZ and HZ. Here we explore the relationship between litter breakdown and the variation in community structure of benthic and hyporheic communities by deploying two standardized bioassays (cotton–strips and two types of commercially available tea bags) in 30 UK streams that encompass a range of environmental conditions. Then, we modelled these assays as a response of the streambed compartment and the biological features of the streambed assemblage (Prokaryota, Protozoa and Eumetazoa invertebrates) to understand the generality and efficiency of litter processing across communities. Litter breakdown was much faster in the BZ compared with the HZ (around 5 time higher for cotton strips and 1.5 times faster for the tea leaves). However, differences in litter breakdown between the BZ and the HZ were mediated by the biological features of the benthos and the hyporheos. Biomass of all the studied biotic groups, α–diversity of Eumetazoa invertebrates and metabolic diversity of Prokaryota were important predictors that were positively related with breakdown coefficients demonstrating their importance in the functioning of the streambed ecosystem. Our study uses a novel multi–metric bioassay that is able to disentangle the contribution by Prokaryota, Protozoa and Eumetazoa invertebrates to litter breakdown. In doing so our study reveals new insights into how organic matter decomposition is partitioned across biota and streambed compartments.