The biological health is related to the chemicals and other physical conditions in the stream that have an impact on whether the fish and other animals are poisoned, can get enough oxygen to breath, have a place to breed, or can find adequate amounts of food.  Here are some of the measures that we can use as indicators:

Dissolved Oxygen (DO)	The amount of molecular oxygen dissolved in water is an important measure of habitat availability for aquatic organisms. Low levels of oxygen result from the introduction of organic waste pollution.  This can come from human sewage, animal runoff from farms, or attached to sediment (soil) which washes into streams if the watershed is unprotected. DO is what the fish and other animals need to breath in the water so depressed levels lead to the disappearance of the species who need the most oxygen.
Biochemical Oxygen Demand (BOD)	BOD is a measure of the amount of oxygen that will be used to decompose organic wastes from the sources discussed under DO.  The bacteria that cause decomposition use oxygen as they feed, reducing the DO levels.  The higher the BOD, the lower the DO downstream of the places where the BOD is high.
Nitrogen	Nitrogen is one of the nutrients used to fertilize crops and lawns.  It is highly soluble and so can move rapidly into the water, especially if it is applied right before a rainstorm.  It can be applied in several forms.  Ammonia nitrogen is often used on farms because it is most readily available to plants.  Nitrate nitrogen is another frequently used form.  Ammonia is directly harmful to fish and can be toxic in sufficient quantities.  Both Ammonia and Nitrate encourage the extraordinary growth of algae in water which can screen out light from bottom plants and promote eutrophication - the choking off of the water with algae and depressed oxygen levels.
Phosphorous	Phosphorous is another of the important plant nutrients. It is highly insoluble in nature but is sometimes applied in soluble forms.  It tends to move with sediments rather than water runoff.  In the water, it also can promote eutrophication.
Sediment	Sediment is loose soil that is washed into the water during rainstorms.  It occurs mostly when there is exposed soil - when a farmer plows a field and leaves it without any plant cover for a period of time, or when a builder clears a site for construction of houses, shopping centers, or roads.  Sediment covers the bottom plants and bottom dwelling organisms, filling in the spaces between rocks that are important parts of the habitat.  This may reduce the effective breeding of fish and destroy the habitat of macroinvertebrates.
pH	pH is a measure of the acidity of water.  Neutral pH is 7.  It goes from 0-14.  Most species prefer a pH near neutral.  Most healthy streams have a pH between 7 and 8.
Temperature	The temperature of the water impacts its ability to hold oxygen.  Warmer water holds less oxygen. When the riparian zone is cleared of trees, they no longer shade the water.  On hot summer days, this will cause the water to become warmer, hold less oxygen, and impact intolerant species. Industrial processes can also heat the water and release warmer water into a stream.