Despite the critical role of water movement in the nutrient dynamics of wetlands, few wetland studies of nutrient imports, exports and cycling have been based on comprehensive water balance studies. In particular, many investigations have underestimated the importance and role of groundwater movement. Nutrient loads entering and leaving a 2 ha reed swamp in the Kiewa Valley, North-east Victoria showed the swamp to be a nutrient source within the landscape under both base flow and storm flow conditions. During a dry period between February 1994 and January 1995 the wetland itself exported 230 kg of Total Nitrogen (115 kg ha−1 yr−1) and 24 kg of Total Phosphorus (12 kg−1 ha−1 yr−1). Investigations confirmed that the wetland was a significant discharge area, and that groundwater accounted for 97% of the surface water and 50% of the Total Nitrogen and Total Phosphorus load leaving the system. A further 30% of Total Nitrogen and 26% of Total Phosphorus leaving the wetland was not attributable to rain/dust, surface water inputs or groundwater, and most likely resulted from the flushing of previously stored nitrogen and phosphorus. A fire which burnt most of the wetland area in September 1994 had little immediate impact on nutrient loads leaving the system. The study illustrates the complexity of assessing the nutrient dynamics and hydrology of natural wetlands, and raises questions with respect to the use of such systems for the interception of diffuse source nutrient loads within rural catchments.