As a fundamental unit of the landscape, hillslopes are studied for their retention and release of water and nutrients across a wide range of ecosystems. The understanding of these near-surface processes is relevant to issues of runoff generation, groundwater–surface water interactions, catchment export of nutrients, dissolved organic carbon, contaminants (e.g. mercury) and ultimately surface water health. We develop a 3-D physics-based representation of the Panola Mountain Research Watershed experimental hillslope using the TOUGH2 sub-surface flow and transport simulator. A recent investigation of sub-surface flow within this experimental hillslope has generated important knowledge of threshold rainfall-runoff response and its relation to patterns of transient water table development. This work has identified components of the 3-D sub-surface, such as bedrock topography, that contribute to changing connectivity in saturated zones and the generation of sub-surface stormflow. Here, we test the ability of a 3-D hillslope model (both calibrated and uncalibrated) to simulate forested hillslope rainfall-runoff response and internal transient sub-surface stormflow dynamics. We also provide a transparent illustration of physics-based model development, issues of parameterization, examples of model rejection and usefulness of data types (e.g. runoff, mean soil moisture and transient water table depth) to the model enterprise. Our simulations show the inability of an uncalibrated model based on laboratory and field characterization of soil properties and topography to successfully simulate the integrated hydrological response or the distributed water table within the soil profile. Although not an uncommon result, the failure of the field-based characterized model to represent system behaviour is an important challenge that continues to vex scientists at many scales. We focus our attention particularly on examining the influence of bedrock permeability, soil anisotropy and drainable porosity on the development of patterns of transient groundwater and sub-surface flow. Internal dynamics of transient water table development prove to be essential in determining appropriate model parameterization. Copyright © 2010 John Wiley & Sons, Ltd.