Field observations of a small stream have indicated that seepage of water into or out of a stream may greatly alter stream competence. Theoretically, water seeping through the stream bed exerts a drag on quartz grains that changes stream competence by the factor 1.65/(1.65 − i) where i is the seepage gradient. Experiments in laboratory flumes, however, indicate that seepage through a stream bed, despite its effect on effective grain density, causes no change in competence in gaining streams nor in losing streams that lack a mud seal. Possibly the expected change in competence is partially counteracted by the accompanying changes in form drag and surface drag on the grains. Flume experiments also show that upward seepage reduces the steepness of bed forms and decreases bed roughness, whereas downward seepage steepens the bed forms and increases bed roughness, but these changes appear to be insufficient to cause any measurable change in the slope of the water surface. Downward seepage in the presence of sufficient suspended sediment, however, can lead to the formation of a mud seal on the surface of a stream bed; this results in a great increase of the effective density of the bed sediment and may result in the total elimination of sediment entrainment from the bed.