Based on data collected from 21 sample sites in 6 sections of the Naoli River，this paper assesses the river’s habitat quality using the Index of Stream Habitat Quality (ISHQ) which includes 3 groups of indices: (1) stream water dimension (flow volume, water quality, index combining flow speed and water depth); (2) channel-riparian dimension (shape, structure and degree of erosion of the channel and riparian vegetation); (3) human disturbance dimension (human activities along the bank, land use, hydraulic facilities). Our findings show that the stream inhabitant quality in the Naoli River is in a good condition with few sites in poor condition. The habitant quality with ranking score of ‘excellent and very good’ is accounted for 47.6 percent of the sampling sites, 33.3 percent with ranking score of ‘average’ and 191 percent with ranking score of ‘poor’. There is no site in this catchment with ranking score of ‘very poor’. This paper concludes that the quality of stream habitat in the Naoli River catchment has been strongly influenced by the land use and land cover in the surrounding areas and is also closely related to the water quality and biological integrity. The paper also highlights the further research direction: to establish index system and criteria for stream inhabitant quality assessment and to set up standardized reference conditions for the key assessment indices.