Remotely sensed estimates of crop residue cover (fR) are required to assess the extent of conservation tillage over large areas; the impact of decay processes on estimates of residue cover is unknown. Changes in wheat straw composition and spectral reflectance were measured during the decay process and their impact on estimates of fR were assessed. Proportions of cellulose and hemicellulose declined, while lignin increased. Spectral features associated with cellulose diminished during decomposition. Narrow-band spectral residue indices robustly estimated fR, while broad-band indices were inconsistent. Advanced multi-spectral sensors or hyperspectral sensors are required to assess fR reliably over diverse agricultural landscapes.