Laboratory tests were undertaken to establish the formative mechanism for steps and pools in steep mountain streams. They indicated that the formation of steps and pools is associated with high intensity, low return interval events and the processes of armouring/paving and antidune formation. Lower than formative discharges give the structures their step-pool appearance, and under such discharges they are extremely stable. Step-pool streams may be modelled by a succession of artificial steps or weirs. Wooden steps were placed in a laboratory channel for this purpose, and clear water flow, clear water scour, and sediment transport tests undertaken for a range of discharges and channel slopes. Three distinct flow regimes were observed for the clear water flow and clear water scour tests. They were stable tumbling flow, unstable tumbling flow, and shooting flow. Sediment transport complicated the regimes from low transport rates. Unstable tumbling flow (clear water flow) at a low slope was shown to be caused by the breaking of standing waves at a theoretical maximum of 0.142. For higher slopes (and including clear water scour tests), unstable tumbling flow was shown to be associated with the physical system geometry preventing the submerged hydraulic jump from developing fully. However, unstable tumbling flow was also caused at lower discharges by sediment waves which were a feature of some test runs with sediment transport. Even so, unstable tumbling flow is likely to occur under field conditions only rarely. With clear water scour, the scour dimensions corresponded to the ultimate static limit. That is, no sediment remains suspended by jet action as occurs for the dynamic limit of scour. For clear water flow and clear water scour, resistance to flow may be predicted by logarithmic equations. Resistance to flow with sediment transport correlated strongly with the average scour hole size. A sudden increase in average (and maximum) velocities indicated that with sediment transport, the erosive ability of a step-pool system may increase sharply as pools become drowned by sediment. For a given discharge, increasing the sediment transport rate beyond this drowning led to net deposition, but no real increase in average velocity. With sediment transport, sediment waves and water waves occurred (independently) despite steady inputs of both water and sediment. This behaviour parallels reports of sediment movement as waves in mountain streams. This tendency toward non-uniformity of water and sediment motion suggests that such behaviour may be explicable in terms of recent advances in nonlinear thermodynamics.