The Stream/River Ecosystem Survey and Health Assessment has been carried out regarding the ecological health of the streams by the Ministry of Environment (MOE), South Korea. However, the sources of impairment of the stream ecosystem and the interactions between the sources, stressors, and the responses of impaired streams have not been taken into consideration. The purpose of this study is to propose the establishment of diagnosis systems for the impaired stream ecosystem because of the need to incorporate the same in the making of the policy to enable the recovery and improvement of the health of the impaired streams or river ecosystem. First, we define the concept of a diagnosis of the impaired stream or river ecosystem through a literature review. Second, through case studies [e.g., US CADDIS (Causal Analysis/Diagnosis Decision Information System), AUS. Eco Evidence, EU WFD (Water Framework Directive)], we try to develop the diagnosis system for the making of policy. In this study, the diagnosis system that is proposed consists of eight steps including the basic data collection, detecting or suspecting impairment, defining the impaired stream reach, identifying the biological impaired cases and listing the candidate causes, illustrating the interactive conceptual diagrams between stressors and responses, investigating the stressors-responses in the field, verifying causes and identifying the probable causes of the impaired cases, and summarizing and proposing the restoration of the streams. The results of this study will support and enable efficient decision-making for sustainable stream restoration and management based on the diagnosis of the probable causes for the impaired complex and the diverse stream ecosystem.