Plant litter decomposition is a key ecosystem process that can be altered by global changes such as biodiversity loss. These effects can be particularly important in detritus-based ecosystems, such as headwater streams, which are mainly fuelled by allochthonous plant litter inputs. However, experiments examining effects of plant diversity on litter decomposition in streams have not reached consensus about which measures of biodiversity are more relevant. We explored the influence of two of these measures, plant species richness (SR; monocultures vs. 3-species mixtures) and phylogenetic distance (PD; species belonging to the same family vs. different families), on leaf litter decomposition and associated processes and variables (nutrient dynamics, fungal biomass and detritivore growth), in a stream microcosm experiment using litter from 9 tree species belonging to 3 families. We found a negative effect of SR on decomposition (which contradicted the results of previous experiments) but a positive effect on fungal biomass. While PD did not affect decomposition, both SR and PD altered nutrient dynamics: there was greater litter and detritivore N loss in low-PD mixtures, and greater litter P loss and detritivore P gain in monocultures. This suggested that the number of species in mixtures and the similarity of their traits both modulated nutrient availability and utilization by detritivores. Moreover, the greater fungal biomass with higher SR could imply positive effects on detritivores in the longer term. Our results provide new insights of the functional repercussions of biodiversity loss by going beyond the often-explored relationship between SR and decomposition, and reveal an influence of plant species phylogenetic relatedness on nutrient cycling that merits further investigation.