Placement of wood in streams has become a common method to increase ecological values in river and stream restoration and is widely used in natural environments. Water managers, however, are often hesitant to introduce wood in channels that drain agricultural and urban areas because of backwater concerns. This study aims to understand and predict wood-induced backwater in lowland streams in different natural conditions. Water levels upstream and downstream of wood patches were hourly gauged and collected for four streams in the Netherlands. Directly after wood insertion, the water level drop over the wood patch increased significantly by 0.1 m relative to a water depth of 0.5 m before wood insertion. The water level drop was found to increase with discharge, up to a certain maximum. If the discharge increased beyond this maximum, the water level drop reduced to the value that may represent the situation without wood. This reduction predominately depends on the obstruction ratio, calculated as the area covered by wood in the channel cross-section divided by the total cross-section area. In addition, morphologic adjustments in the stream and reorientation of the woody material reduced the water level drop over the patches in time. A newly developed, one-dimensional stationary model demonstrates that backwater effects can be reduced by optimizing the location where wood patches are placed, and by manipulating the obstruction ratio. The model can therefore function as a generic tool to achieve a stream design with wood that optimizes the hydrological and ecological potential of streams.