A common water quality issue is an excess of nutrients which can lead to problems such as eutrophication. Stream restoration is one method by which improvements in water quality may be attempted. One strategy is increasing hyporheic zone flow at baseflow by addition of instream structures. The hyporheic zone can be an area of increased biogeochemical activity, with potential enhancement of reactions such as denitrification. However, the comparative effects of various instream restoration techniques, as well as the role of watershed setting and corresponding environmental characteristics in which restoration occurs (e.g., hydraulic conductivity, stream slope), are still poorly understood. In this study we numerically modeled groundwater and surface water interaction in a 200 m second order stream reach in southwestern Virginia using MIKE SHE. We calibrated the model to hydrologic and tracer data available during field tests of restoration techniques. We then simulated different types of instream restoration techniques (e.g., fully and partially channel-spanning weirs and buried structures), and varied hydrologic and biogeochemical controlling factors driven by watershed setting. The measured effects for this sensitivity analysis were direction and magnitude of surface water-groundwater exchange and amount of denitrification. We found that factors related to watershed setting had the greatest effect on surface water-groundwater exchange and on denitrification, including streambed hydraulic conductivity, natural or background stream topography and slope, and groundwater levels. Type and number of instream structures also influenced surface water-groundwater exchange and denitrification, but to a lesser degree, and the effect of structures was in turn controlled by watershed setting. Watershed setting was thus the largest control, both on exchange overall, and the effectiveness of structures. Human effects on watersheds such as agriculture and urbanization therefore likely play a role in whether reach-scale restoration practices succeed in achieving water quality goals. More broadly, restoration efforts at the watershed scale itself, such as reducing fertilizer use or improving stormwater management, may be necessary to achieve ambitious water quality goals. Nevertheless, reach-scale restoration efforts such as in-stream structures may play a useful role in certain watershed settings. Furthermore, other reach-scale restoration techniques that affect streambed topography, such as addition of pool-riffle sequences, may be more effective, and bear investigation.