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Deforestation in the tropical Andes is affecting ecological conditions of streams, and determination of how much forest should be retained is a pressing task for conservation, restoration and management strategies. We calculated and analyzed eight benthic metrics (structural, compositional and water quality indices) and a physical-chemical composite index with gradients of vegetation cover to assess the effects of deforestation on macroinvertebrate communities and water quality of 23 streams in southern Ecuadorian Andes. Using a geographical information system (GIS), we quantified vegetation cover at three spatial scales: the entire catchment, the riparian buffer of 30 m width extending the entire stream length, and the local scale defined for a stream reach of 100 m in length and similar buffer width. Macroinvertebrate and water quality metrics had the strongest relationships with vegetation cover at catchment and riparian scales, while vegetation cover did not show any association with the macroinvertebrate metrics at local scale. At catchment scale, the water quality metrics indicate that ecological condition of Andean streams is good when vegetation cover is over 70%. Further, macroinvertebrate community assemblages were more diverse and related in catchments largely covered by native vegetation (>70%). Our results suggest that retaining an important quantity of native vegetation cover within the catchments and a linkage between headwater and riparian forests help to maintain and improve stream biodiversity and water quality in Andean streams affected by deforestation. This research proposes that a strong regulation focused to the management of riparian buffers can be successful when decision making is addressed to conservation/restoration of Andean catchments.