The quality and quantity of Mongolia’s water resources are being degraded by inefficient water-management. There is no widely accepted biomonitoring system for Mongolia, only hydrological and chemical monitoring, with limited relevance for humans and other living organisms. Therefore, this study has aimed to develop a Mongolian-specific multimetric index and biocriteria applicable to the biological assessment of Mongolian streams. A total of 80 first- to third-order streams in northern Mongolia were selected, each representing different gradients of land use. The reference and impaired sites have been determined based on various physicochemical characteristics, instream features, and habitat assessment criteria. In total, 200 candidate metrics representing the following four categories were used: diversity/richness, composition/abundance, functional and habitat traits, and tolerance/sensitivity. The resulting candidate metrics were evaluated using a stepwise procedure that evaluated metric variability, redundancy, sensitivity, and responsiveness to environmental gradients. Then the range of the multimetric index score (numerical value 0–1) was subdivided into four categories (reference/excellent, good, moderate, poor) related to level of impairment. Thus, this multimetric index successfully distinguished reference from impaired conditions, demonstrating its applicability for northern Mongolian stream assessment. Hence, the Mongolian-specific macroinvertebrate multimetric Index can be used as a principal assessment tool for assessing waterways in northern Mongolia and possibly throughout the country, detecting future changes and providing valuable information for land-use management and conservation of aquatic ecosystems of Mongolia.