Understanding the habitat preferences and requirements of the aquatic invertebrates is important for effective biomonitoring. We explored habitat preference and β -diversity of macroinvertebrates at 59 sampling sites from 18 watersheds of the Jhelum River Basin in Kashmir Himalaya. Macroinvertebrates were collected, sorted, identified, and enumerated from four habitat types (Run, Riffle, Glide, and Pool) from 59 sites during the 8 seasons from Summer 2017 to Spring 2019. Stream habitats differed significantly based on the number of taxa (species richness) and density (ind./m2) across the seasons. β -diversity assessment revealed that the Riffle, Glide, Run, and Pool differed in dispersion using the abundance/count data across the seasons with a more pronounced difference during autumn and winter seasons. Habitats displayed homogeneity among group dispersion (i.e., composition varies similarly) while having different compositions. Non-metric multidimensional scaling and multivariate dispersion showed greater similarity between Run–Pool and Riffle–Glide in terms of macroinvertebrate composition. Indicator species analysis based on relative abundance (%) revealed different habitat preferences of macroinvertebrate taxa. Simper analysis identified 18 taxa that contributed greatest to the dissimilarity between habitats for each season. Biomonitoring assessment categorized Jhelum River Basin into three water class categories: upstream reaches (60%) fall under Class A, midstream reaches (25%) belong to Class B, and downstream reaches fall under Class C and D (15%) categories, respectively. Our findings reinforce the relevance of macroinvertebrate communities as bioindicators for guiding the policy intervention for effective monitoring and appropriate management strategies of different watersheds in the Jhelum River Basin.