The ecosystem of Alum Cave Creek is rich and diverse, and it supports a wide range of plant and animal species that are adapted to the unique environmental conditions found in the Great Smoky Mountains National Park.

The creek and surrounding forest are part of the Southern Appalachian spruce-fir forest ecosystem, characterised by high-elevation forests dominated by conifers such as spruce and fir. The forest is also home to hardwood trees, such as birch, beech, and maple, found at lower elevations.

The stream itself provides a habitat for a diverse array of aquatic species, including trout, darters, and salamanders. These species rely on the cool, clear water and the rocky substrate of the creek for habitat and breeding. The surrounding forest provides a habitat for various bird species, including warblers, thrushes, and woodpeckers.

The forest and stream also play an important role in regulating the region's water cycle, which is essential for maintaining the health of the surrounding ecosystem. The forest helps to capture and store water, which is released slowly over time, reducing the likelihood of floods and droughts.

Visitors are advised to practice Leave No Trace principles to help protect the park's delicate ecosystem. This includes packing out all trash, respecting wildlife and their habitats, and staying on designated trails to minimise impacts on the surrounding environment.