We hypothesised and tested a hierarchical organisation model where riparian landcover would influence bank composition and light availability, which in turn would influence instream environments and control fish assemblages. The study was conducted during the dry season in 11 headwater tributaries of the Sorocaba River in the upper Paraná River Basin, south-eastern Brazil. We focused on seven environmental factors each represented by one or multiple environmental variables and seven fish functional traits each represented by two or more classes. Multivariate direct gradient analyses suggested that riparian zone landcover can be considered a higher level causal factor in a network of relations that control instream characteristics and fish assemblages. Our results provide a framework for a hierarchical conceptual model that identifies singular and collective influences of variables from different scales on each other and ultimately on different aspects related to stream fish functional composition. This conceptual model is focused on the relationships between riparian landcover and instream variables as causal factors on the organisation of stream fish assemblages. Our results can also be viewed as a model for headwater stream management in that landcover can be manipulated to influence factors such as bank composition, substrates and water quality, whereas fish assemblage composition can be used as indicators to monitor the success of such efforts.