The objective of this paper was to provide new insights into processes affecting riverbank filtration (RBF). We consider a system with an inflatable dam installed for enhancing water production from downstream collector wells. Using a numerical model, we investigate the impact of groundwater pumping and dam operation on the hydrodynamics in the aquifer and water production. We focus our study on two processes that potentially limit water production of an RBF system: the development of an unsaturated zone and riverbed clogging. We quantify river clogging by calibrating a time-dependent riverbed permeability function based on knowledge of pumping rate, river stage, and temperature. The dynamics of the estimated riverbed permeability reflects clogging and scouring mechanisms. Our results indicate that (1) riverbed permeability is the dominant factor affecting infiltration needed for sustainable RBF production; (2) dam operation can influence pumping efficiency and prevent the development of an unsaturated zone beneath the riverbed only under conditions of sufficient riverbed permeability; (3) slow river velocity, caused by dam raising during summer months, may lead to sedimentation and deposition of fine-grained material within the riverbed, which may clog the riverbed, limiting recharge to the collector wells and contributing to the development of an unsaturated zone beneath the riverbed; and (4) higher river flow velocities, caused by dam lowering during winter storms, scour the riverbed and thus increase its permeability. These insights can be used as the basis for developing sustainable water management of a RBF system.