Decentralized stormwater management approaches (e.g., biofiltration swales, pervious pavement, green roofs, rain gardens) that capture, detain, infiltrate, and filter runoff are now commonly used to minimize the impacts of stormwater runoff from impervious surfaces on aquatic ecosystems. However, there is little research on the effectiveness of retrofit, parcel-scale stormwater management practices for improving downstream aquatic ecosystem health. A reverse auction was used to encourage homeowners to mitigate stormwater on their property within the suburban, 1.8 km² Shepherd Creek catchment in Cincinnati, Ohio (USA). In 2007–2008, 165 rain barrels and 81 rain gardens were installed on 30% of the properties in four experimental (treatment) subcatchments, and two additional subcatchments were maintained as controls. At the base of the subcatchments, we sampled monthly baseflow water quality, and seasonal (5×/year) physical habitat, periphyton assemblages, and macroinvertebrate assemblages in the streams for the three years before and after treatment implementation. Given the minor reductions in directly connected impervious area from the rain barrel installations (11.6% to 10.4% in the most impaired subcatchment) and high total impervious levels (13.1% to 19.9% in experimental subcatchments), we expected minor or no responses of water quality and biota to stormwater management. There were trends of increased conductivity, iron, and sulfate for control sites, but no such contemporaneous trends for experimental sites. The minor effects of treatment on streamflow volume and water quality did not translate into changes in biotic health, and the few periphyton and macroinvertebrate responses could be explained by factors not associated with the treatment (e.g., vegetation clearing, drought conditions). Improvement of overall stream health is unlikely without additional treatment of major impervious surfaces (including roads, apartment buildings, and parking lots). Further research is needed to define the minimum effect threshold and restoration trajectories for retrofitting catchments to improve the health of stream ecosystems.