In the Hakarimata Range, west of Hamilton, New Zealand, second‐order streams appear to be wider in native than in pasture catchments, whereas streams in pine plantations (18 years old) appear to be suffering active stream‐bank erosion. A working hypothesis to explain these observations was that pasture vegetation replacing original forest encroaches on the stream channel, causing it to become narrower. To test the hypothesis, channel widths were measured up stream and down stream of “transitions” from native forest to pasture in 20 streams of different size in marginal ranges of the Waikato Basin. Small streams (catchment area <1 km2, width in forest <2 m) were found to be half the width in pasture reaches as in forest. The degree of channel narrowing decreased as stream size increased and was minimal in large streams (catchment area >30 km2, width in forest >10 m). This narrowing of stream channels implies that native forest clearance in New Zealand has reduced stream channel habitat. A concern regarding riparian planting for stream restoration is that sediment stored in pasture stream banks could be mobilised if grasses are extinguished by shading, resulting in turbid streamwater and sedimentation of fines in the channel.