Urbanization strongly influences headwater stream chemistry and hydrology, but little is known about how these conditions impact bacterial community composition. We predicted that urbanization would impact bacterial community composition, but that stream water column bacterial communities would be most strongly linked to urbanization at a watershed-scale, as measured by impervious cover, while sediment bacterial communities would correlate with environmental conditions at the scale of stream reaches. To test this hypothesis, we determined bacterial community composition in the water column and sediment of headwater streams located across a gradient of watershed impervious cover using high-throughput 16S rRNA gene amplicon sequencing. Alpha diversity metrics did not show a strong response to catchment urbanization, but beta diversity was significantly related to watershed impervious cover with significant differences also found between water column and sediment samples. Samples grouped primarily according to habitat-water column vs. sediment-with a significant response to watershed impervious cover nested within each habitat type. Compositional shifts for communities in urbanized streams indicated an increase in taxa associated with human activity including bacteria from the genus Polynucleobacter, which is widespread, but has been associated with eutrophic conditions in larger water bodies. Another indicator of communities in urbanized streams was an OTU from the genus Gallionella, which is linked to corrosion of water distribution systems. To identify changes in bacterial community interactions, bacterial co-occurrence networks were generated from urban and forested samples. The urbanized co-occurrence network was much smaller and had fewer co-occurrence events per taxon than forested equivalents, indicating a loss of keystone taxa with urbanization. Our results suggest that urbanization has significant impacts on the community composition of headwater streams, and suggest that processes driving these changes in urbanized water column vs. sediment environments are distinct.