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Predicted trends towards more intense droughts are of particular significance for running water ecosystems, as the loss of critical stream habitat can provoke sudden changes in biodiversity and shifts in community structure. However, analysing ecological responses to the progressive loss of stream habitat requires a continuous disturbance gradient that can only be generated through large‐scale manipulations of streamflow.In the first experiment of its kind, we used large artificial stream channels (mesocosms) as analogues of spring‐fed headwaters and simulated a gradient of drought intensity that encompassed flowing streams, disconnected pools, and dry streambeds. We used breakpoint analysis to analyse macroinvertebrate community responses to intensifying drought, and identify the taxa and compositional metrics sensitive to small changes in drought stress.We detected breakpoints for >60% of taxa, signalling sudden population crashes or irruptions as drought intensified. Abrupt changes were most pronounced where riffle dewatering isolated pools. In the remnant wetted habitat, we observed a shift to larger body sizes across the community, primarily driven by irruptions of predatory midge larvae and coincident population collapses among prey species (worms and smaller midges).Our results suggest that intense predation in confined, fragmented stream habitat can lead to unexpected changes in body sizes, challenging the conventional wisdom that droughts favour the small. Pool fragmentation might thus be the most critical stage of habitat loss during future droughts, as the point at which impacted rivers and streams begin to exhibit major shifts in fundamental food web properties. [ABSTRACT FROM AUTHOR]