The alarming declines of freshwater biodiversity call for efficient biomonitoring at fine spatiotemporal scales, such that conservation measures be grounded upon accurate biodiversity data. Here, we show that combining environmental DNA (eDNA) extracted from stream water samples with models based on hydrological first principles allows upscaling biodiversity estimates for aquatic insects at very high spatial resolution. Our model decouples the diverse upstream contributions to the eDNA data, enabling the reconstruction of taxa distribution patterns. Across a 740-km2 basin, we obtain a space-filling biodiversity prediction at a grain size resolution of 1-km long stream sections. The model's accuracy in matching direct observations of aquatic insects' local occurrence ranges between 57-100%. Our results demonstrate how eDNA can be used for high-resolution biodiversity assessments in rivers with minimal prior knowledge of the system. Our approach allows identification of biodiversity hotspots that could be otherwise overlooked, enabling implementation of focused conservation strategies.