Many streams impacted by acid mine drainage (AMD) are also located in watersheds with high nutrient loading. Little is known about the effect of AMD on ecosystem function in nutrient-impacted streams. This study examined the effects of AMD on leaf litter breakdown, enzyme activity, and microbial respiration in a nutrient-impacted stream in Central Pennsylvania. Breakdown rates and microbial respiration on maple leaves along with enzyme activities on leaf and artificial substrata were measured in an AMD-impacted site. Results were compared to a nutrient-impacted site above the AMD outfall. Leaf litter had slower breakdown rates, lower microbial respiration, and lower phenol oxidase activity in the AMD-impacted site compared to the upstream site. It is possible that AMD inhibition of phenol oxidases might have prevented the microorganisms from degrading polyphenolic compounds in the leaf litter. The ratio of leucine-aminopeptidase to phosphatase activity was lower in AMD-impacted site. Even though this stream is subjected to high phosphorus loading, these results suggest that the AMD-impacted site was phosphorus limited, which may be caused by phosphate and metal hydroxide complexation. Overall these results suggest that the reduced ecosystem function in the AMD-impacted site may in part be caused by phosphorus limitation and enzyme inhibition.