As efforts intensify to address the issues of declining water quality and biodiversity losses in freshwater ecosystems, there have been great demands for effective methods of evaluating aquatic ecosystem health. In this study, benthic algae assemblages and water quality variables were analyzed to develop a benthic diatom-based index of biotic integrity (BD-IBI) for assessment of the aquatic environment in the upper Han River (China). Through the use of multivariate and multimetric approaches, four metrics – % prostrate individuals, % Amphora individuals, %polysaprob species, and diatom-based eutrophication/pollution index (EPI-D) – were identified from 98 candidate metrics to develop a BD-IBI. Application of the index revealed that water quality in 11% of the 31 sampled sites could be described as excellent condition, in 43% of the sites it could be described as good condition, in 25% as moderate condition, and in 21% as poor condition. The assessment further revealed that the main reason for degradation of the Han river ecosystem was nutrient enrichment through agricultural land use.