Heterogeneity in small-scale subsurface flow processes does not necessarily lead to complex system behavior at larger scales. Here we use the simple dynamical systems approach recently proposed by Kirchner (WRR, 2009) to analyze, characterize, and simulate streamflow dynamics in the Swiss Rietholzbach catchment. The Rietholzbach data set used here provides 32 years of continuous and high-quality observations, which include a soil moisture profile and unique observations of storage changes and evapotranspiration measured by a weighing lysimeter. Streamflow recession at the daily time scale shows a marked seasonal cycle and is fastest in summer due to the higher evapotranspiration losses. The discharge sensitivity function linking storage and discharge is nonlinear and slightly downward-curving in double-logarithmic space. Small diurnal discharge fluctuations prevent application of the approach at the hourly resolution for low-discharge conditions. The vast majority of runoff peaks can be explained by storage variations, except peaks that follow events with extreme precipitation intensity (30–40 mm h−1). Storage change dynamics inferred from streamflow variations compare well to observations from the lysimeter and simulations with a land surface model but become very uncertain under dry conditions. Good results can be obtained when the discharge sensitivity function is calibrated on a monthly time scale to avoid the effect of the diurnal discharge fluctuations. Our analysis highlights the importance of evapotranspiration for catchment hydrology, as it is the main driver of changes in streamflow at Rietholzbach for 21% of the time.