Defining reference conditions is a crucial element in quantifying the extent of anthropogenic modification and for identifying restoration targets in riverine ecosystems. Despite palaeoecological approaches being widely applied in lakes to establish reference conditions, their use in lotic ecosystems remains limited. In this study, we examine contemporary, historical (1930 and 1972), and palaeoecological macroinvertebrate biodiversity and biomonitoring scores in Eastburn Beck, a headwater tributary of the River Hull (UK) to determine if palaeoecological approaches can be used to characterize lotic system reference conditions. Palaeoecological samples comprised a greater gamma diversity (18 taxa) than contemporary samples (8 taxa), samples taken in 1972 (11 taxa) and 1930 (8 taxa). Palaeoecological samples supported taxonomically different Gastropoda, Trichoptera, and Coleoptera (GTC) communities compared with contemporary and historical samples (1930 and 1972). Results from biomonitoring indices using the GTC community indicated that the palaeochannel had (a) similar invertebrate biological quality, (b) a less energetic flow regime, and (c) increased fine sediment deposits compared with the contemporary channel. The results clearly illustrate that palaeoecological data can provide a suitable method to characterize reference conditions for lotic habitats. However, it is important to recognize that faunal data from palaeochannel deposits provide a short-term “snapshot” of the conditions within the river immediately prior to its hydrological isolation. River restoration activities should therefore draw on multiple lines of evidence, including palaeoecological information where possible, to characterize a range of reference conditions to reflect the highly dynamic nature of lotic ecosystems.