Contamination of groundwater from onsite disposal of septic tank effluent is an increasing concern. In this study, HYDRUS-2D simulated the impact of clustered disposal systems on NO3− and fecal coliforms in groundwater in a rural community near Christchurch, New Zealand. The model included nine disposal boulder pits, embedded 4 m below the surface in alluvial gravel media, in a domain of 3.3 km by 30 m (including both unsaturated and saturated zones). Water movement between the ground surface and the disposal pits was simulated using HYDRUS-1D. The performance of the two-dimensional model was evaluated using monitoring data obtained from a 1977 study. Applying the daily climate data for 1974 to 1977, the simulated NO3− and bacteria concentrations in the groundwater were similar to those observed. Both observed and simulated results showed that clustered disposal systems have a significant cumulative impact on NO3− concentrations in groundwater, but the impact of fecal coliforms from individual systems is localized. This study further demonstrates that groundwater has a limited ability to dilute NO3−, requiring at least 2.9 km for NO3− to be reduced to near background levels. Therefore, disposal systems must treat effluent efficiently and water wells downgradient of closely clustered disposal systems must be deep enough to avoid the adverse health effects of NO3−. Sensitivity analysis suggests that the model results are most sensitive to changes in hydraulic conductivity, effluent concentrations and discharge rate, and the removal rate of bacteria in the unsaturated zone. Therefore, the accurate estimation of these parameters is a fundamental requirement for the model to produce realistic results.