Excessive nutrient loading of water bodies is a leading cause of water pollution worldwide and controlling nutrient levels in watersheds is a primary objective of most environmental policy. Over the past two decades, much research has shown that ecosystems with more species are more efficient at removing nutrients from soil and water than are ecosystems with fewer species. In this paper, the author presents the results of a novel experiment in which the author directly manipulated algae and their niche opportunities in a large set of stream mesocosms to examine the mechanistic links between the diversity of algae, niche differences among species and the rate of nitrate removal from stream water. The results provide direct evidence that communities with more species take greater advantage of the niche opportunities in an environment, and this allows diverse systems to capture a greater proportion of biologically available resources such as nitrogen. One implication is that biodiversity may help to buffer natural ecosystems against the ecological impacts of nutrient pollution.