Both benthic algae and allochthonous organic matter are dominant energy sources in headwater streams, but little is known about interactions between these sources.  We hypothesized that algae could either decrease leaf decomposition by competition with microbes or increase leaf decomposition by increasing invertebrate shredding activity.  To test these hypotheses, we placed leaf packs in a headwater stream and manipulated light, macroinvertebrate access, and nutrient addition (N+P) in a 2x3 factorial experiment.  The light reduction treatment significantly reduced algal biomass within leaf packs (p<0.001).  We observed a significant interaction effect on leaf decomposition between light and macroinvertebrate access to leaf packs (p=0.01).  Decomposition was faster in light compared to dark treatments in the presence of macroinvertebrates and slower in light compared to dark treatments in the absence of macroinvertebrates.  Additionally, macroinvertebrate community composition on leaf packs was affected by both nutrient addition and light, although we did not observe a nutrient effect on decomposition rates, suggesting microbes did not compete with algae for N/P.  These results support our hypothesis that algae may have complex effects on leaf decomposition and suggest that interactions between energy sources may have significant effects on headwater stream function.