A fish survey in 35 stream reaches (from 1st to 3rd order) with physicochemical and habitat assessment in the São José dos Dourados system, southeastern Brazil, was conducted. Most of the basin land cover (77.4%) is used for pasture. From the sampled stream reaches, 24 were of good physicochemical quality, 10 of fair quality, and only one of poor quality. A habitat assessment showed that 10 stream reaches were considered fair, 22 were poor, and 3 were very poor. Fifty species were collected and their abundances showed strong correlation with habitat descriptors. In addition to the correlation between fish abundance and habitat, some species also showed optimal distribution related to the degree of physical habitat conservation. Streams located in this region experience organic pollution, but the most important aspect is the decline of the instream physical habitat condition, especially in first order streams, which negatively affects coarse substrates and water column dependent fish species. Effluent control, riparian vegetation restoration programs, siltation control and adequate sustainable soil use are practices which could mitigate such impacts.