We investigated how the source and composition of stream dissolved organic matter (DOM) influenced rates of benthic bacterial C production (BCP) in 20 forested, headwater streams in southern Tasmania. We also assessed whether the source and composition of stream DOM was influenced by clearfell forest harvesting (1–19 y after harvest). Stream DOM was dominated by humic- and fulvic-like fluorescence (86.3–95.5%) as measured by parallel factor (PARAFAC) analysis of DOM fluorescence. Several reach-scale environmental variables showed significant positive (leaf-area index, sediment total N, organic C) or negative (stream temperature) linear relationships with BCP. However, an increasing contribution of terrestrial DOM, as measured by a decreasing fluorescence index (FI), was the strongest variable driving in situ benthic BCP (R²  =  0.38, p  =  0.004, n  =  20). Forest harvesting did not significantly affect DOM source despite the major reach-scale disturbance that clearfell forestry represents. Nevertheless, conflicting evidence was found for changes in DOM composition after harvesting. Catchment-scale processes probably are more important than reach-scale processes in determining stream DOM biogeochemistry because clearfelled areas are small relative to the total catchment area. Our results demonstrate that freshly leached, terrestrial DOM can influence stream ecosystem processes through the tight biogeochemical linkage that exists between forested, headwater streams and their surrounding terrestrial environment.