We investigated variations of Mg concentration, δD and δO in precipitation, soil water along a planar hillslope, groundwater, and first-order stream water at the Susquehanna Shale Hills Critical Zone Observatory (SSHO). Water flows vertically in the unsaturated zone of the hillslope, but hydrological saturation periodically causes lateral flow along interfaces of permeability contrast between the A–B and B–C soil horizons. Changes in soil water Mg concentration respond to hydrological changes and are ultimately controlled by the kinetics of clay mineral dissolution, but are buffered by the soil exchange capacity. Clay dissolution predominantly occurs within the A and B horizons, and Mg released from these zones of “low-flow” diffuses or flows into the “high-flow” zones at horizon interfaces. The Mg concentrations are low in these high-flow zones because fresher (younger) water flows in through macropores. The amplitude of seasonal variations in water isotopes (data from 2008–2010) decreases in the following order: precipitation (δD: 286‰) >> soil water (δD: 86‰) > shallow groundwater (δD: 26‰), indicating water becomes progressively older along the flowpath. Fractures and preferential high-flow paths make the watershed hydrologically responsive: the average time water stays in the shallow subsurface is inferred to be <2 yr. The stream water chemistry is affected by inputs of old groundwater that is relatively high in Mg concentration but relatively limited in range in δD, as well as by inputs from young soil water that is relatively low in Mg concentration with a wide range in δD. The relative contributions of these two sources to the stream change seasonally.