Unlike rivers in humid regions, dryland rivers typically exhibit reduced flow in the downstream direction as a result of transmission losses, which include seepage of streamflow into the aquifer, evaporation, and transpiration. However, much remains to be learned about the nature of the exchange between surface water and groundwater in these landscapes, especially in terms of spatial and temporal variability. Our study focused on streambank seepage and groundwater flow in the alluvial aquifer, specifically on answering questions such as: Is there seasonal variability in seepage losses? Is seepage permanently lost? Can losses be reduced by killing riparian vegetation? To better understand the magnitude, variability, and fate of streambank seepage, we assessed river stages, groundwater hydraulic gradients, and groundwater flow paths at two sites along a reach of the Pecos River, a dryland perennial river in West Texas. We found that along this reach the river was losing water to the aquifer even under low-flow conditions; but seepage was controlled by a number of different mechanisms. Seepage increased not only during high-flow events but also when the groundwater level was declining owing to long periods of no irrigation release. Tamarix (saltcedar) control did not affect hydraulic gradients nor reduce streambank seepage and given that this reach of the Pecos River is a losing one, streamflow will not be enhanced by controlling saltcedar. These findings can be used to improve basic conceptual models of dryland river systems and to predict hydrologic responses to changes in the timing and magnitude of streamflows and to riparian vegetation management. Copyright © 2012 John Wiley & Sons, Ltd.