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Summary While many streams and rivers are dominated by terrestrial inputs of organic carbon, algae are an important trophic base for stream food webs. However, the nutritional importance of algae for stream invertebrates only recently has been highlighted. Algae are acknowledged as higher quality food than terrestrial organic matter for the growth and reproduction of invertebrates. In part, this is because of higher algal polyunsaturated fatty‐acid ( PUFA ) content. Here, we review the important influence of algal food quality, as assessed by PUFA , in stream food webs. Current field investigations have mainly focused on the fatty‐acid dynamics of macroinvertebrates, and indicate that algal eicosapentaenoic acid ( EPA ), α‐linolenic acid ( ALA ) and linoleic acids ( LIN ) are present in all macroinvertebrates. However, fungal and bacterial tracers have also been observed in a range of macroinvertebrates. The omega‐3 (ω3)/omega‐6 (ω6) ratio >1 in most macroinvertebrates strongly indicates that dietary energy of algae is highly retained in stream food webs. Interspecific differences in PUFA composition seem to be affected by dietary PUFA and consumer physiology. Some studies have suggested that besides dietary EPA , the shorter chain C18 PUFA LIN and ALA also can improve growth and reproduction of stream invertebrate consumers. Some macroinvertebrates may preferentially retain or synthesise long‐chain PUFA from C18 PUFA when experiencing low‐quality food. However, this process is controversial since other species have shown very limited ability to synthesise long‐chain PUFA . Algal PUFA composition is strongly influenced by abiotic factors, particularly light, nutrients, and temperature. Human disturbance (i.e. riparian vegetation removal and nutrient inputs) on algal PUFA content and their consequent effects on macroinvertebrates and fish clearly warrant further scientific attention. Controlled feeding trials and manipulative studies are required to measure PUFA conversion capacities and reproductive investment of stream macroinvertebrates under different food quality conditions, which will provide insights into how freshwater species can cope with different nutritional food conditions due to human disturbance and climate change.