Choose a location for the stream, pond and waterfall that can be viewed from the house and patio. Check with a level and ruler to see that the minimum slope for the streambed is 2 inches for every 10 feet of streambed. Plan a higher falls for louder water sounds -- about a foot or more will mask noisy street sounds. Keep the falls low for gentle musical splashing -- about 2 to 4 inches in height. Mark the outline of the waterfall, streambed and pond sites with spray paint.
Dig the trench for the stream and the basin for the pond. Maintain the slope of the streambed to prevent water pooling in midstream. Place a preformed pond basin in the hole for the pond. Line the streambed with pond liner that overlaps the edge of the pond basin and covers the area for the waterfall.
Dig a trench for PVC pipe to hold the water hose from the pump to the waterfall. Dig it next to the streambed so you can access it without disturbing the streambed if repairs are necessary. Lay the pipe in the trench.
Place a submersible pump in the pond basin, covered by a mesh basket to keep leaves and gravel out of the pump. Snake the power cord over the edge of the pond. Attach the water delivery hose to the pump and thread it through the pipe to the waterfall site. Bury the pipe.
Dig a shallow trench from the pond to the outdoor power source for a length of PVC pipe to hold the power cord. Run the power cord through the pipe and bury the pipe.
Place boulders and large stones along the edges of the stream bed and in the stream. Use the large boulders on the shoulders and arrange smaller stones and boulders to make a realistic-looking stream. Use black foam sealant on the bottom of the stones to adhere them to the streambed liner so they don’t shift.
Set the stones and boulders in place for the waterfall, being careful to position one or two flat rocks for water to sheet over to make the falls. Use foam sealant to fasten the base boulders to the pond liner and to secure the rock formation you stack for the falls. Run the water hose up the back of the falls and hide it under stones. Fill in any chinks with small stones and rock chips to position boulders securely.
Let the sealant dry and use a garden hose to test the falls. Check to see that water flows over the stones, sheets over the flat edge or edges and falls realistically. If water is slipping behind or under stones, adjust the tilt of the flat stones slightly toward the stream and add more foam between stones to channel the water properly.
Layer gravel and decorative stones in the streambed to cover any visible pond liner. Set stones and boulders around the edge of the pond so it looks like an extension of the stream. Fill the pond with water and plug in the pump.
Landscape the pond, waterfall area and streambed border with ferns and greenery. Or spread more stones and boulders to create an austere and rocky landscape around your backyard water feature.