1. We determined the effects of nutrient enrichment on wood decomposition rates and microbial activity during a 3-year study in two headwater streams at Coweeta Hydrologic Laboratory, NC, U.S.A. After a 1-year pretreatment period, one of the streams was continuously enriched with inorganic nutrients (nitrogen and phosphorus) for 2 years while the other stream served as a reference. We determined the effects of enrichment on both wood veneers and sticks, which have similar carbon quality but differ in physical characteristics (e.g. surface area to volume ratios, presence of bark) that potentially affect microbial colonisation and activity. 2. Oak wood veneers (0.5 mm thick) were placed in streams monthly and allowed to decompose for approximately 90 days. Nutrient addition stimulated ash-free dry mass loss and increased mean nitrogen content, fungal biomass and microbial respiration on veneers in the treatment stream compared with the reference. The magnitude of the response to enrichment was great, with mass loss 6.1 times, and per cent N, fungal biomass and microbial respiration approximately four times greater in the treatment versus reference stream. 3. Decomposition rate and nitrogen content of maple sticks (ca. 1-2 cm diameter) also increased; however, the effect was less pronounced than for veneers. Wood response overall was greater than that determined for leaves in a comparable study, supporting the hypothesis that response to enrichment may be greater for lower quality organic matter (high C:N) than for higher quality (low C:N) substrates. 4. Our results show that moderate nutrient enrichment can profoundly affect decomposition rate and microbial activity on wood in streams. Thus, the timing and availability of wood that provides retention, structure, attachment sites and food in stream ecosystems may be affected by nutrient concentrations raised by human activities.