In this paper we develop a conceptual and observational case in which soil water patterns in temperate regions of Australia switch between two preferred states. The wet state is dominated by lateral water movement through both surface and subsurface paths, with catchment terrain leading to organization of wet areas along drainage lines. We denote this as nonlocal control. The dry state is dominated by vertical fluxes, with soil properties and only local terrain (areas of high convergence) influencing spatial patterns. We denote this as local control. The switch is described in terms of the dominance of lateral over vertical water fluxes and vice versa. When evapotranspiration exceeds rainfall, the soil dries to the point where hydraulic conductivity is low and any rainfall that occurs essentially wets up the soil uniformly and is evapotranspired before any significant lateral redistribution takes place. As evapotranspiration decreases and/or rainfall increases, areas of high local convergence become wet, and runoff that is generated moves downslope, rapidly wetting up the drainage lines. In the wet to dry transitional period a rapid increase in potential evapotranspiration (and possibly a decrease in rainfall) causes drying of the soil and “shutting down” of lateral flow. Vertical fluxes dominate and the “dry” pattern is established. Three data sets from two catchments are presented to support the notion of preferred states in soil moisture, and the results of a modeling exercise on catchments from a range of climatic conditions illustrate that the conclusions from the field studies may apply to other areas. The implications for hydrological modeling are discussed in relation to methods for establishing antecedent moisture conditions for event models, for distribution models, and for spatially distributing bulk estimates of catchment soil moisture using indices.