Benthic algae, especially diatoms, are commonly used to assess water quality in rivers. However, algal-based assessments are challenging at the river system scale because longitudinal variation in physical habitat conditions may obscure algal responses to changes in water quality. In the present study, we surveyed benthic diatoms and environmental variables from a mountainous Chinese river system. Hierarchical clustering, discrimination analysis, and indicator species analysis were used together to explore associations between distribution patterns of diatom assemblages and water quality variables. Study sites were clustered into five groups based on their diatom community composition, with sites grouped by the sampling months. Chemical oxygen demand (COD), elevation, and total nitrogen (TN) were the most important predictors for site classification. Site groups with higher elevations had higher TN concentrations; however, COD concentrations were higher in lower elevation groups. Moreover, COD concentrations significantly differed between temporally separated groups. In total, 49 indicator species were identified for individual groups, with most taxa indicating the eutrophic condition. Additionally, we found that European diatom indices are not closely associated with water quality variables. We conclude that the identification of algal patterns and their driving forces can provide valuable information to aid bioassessment at the river system scale.