Water quality along the Waratah Rivulet in the Woronora Lake Catchment, New South Wales (NSW), Australia, has been monitored during the last three years by the Sydney Catchment Authority. Water quality data shows changes in chemical composition due to cracking of streambeds and rockbars, and diversion of surface water into subsurface routes in the Hawkesbury Sandstone aquifer. Water quality upstream of the longwall panels is comparable to nearly pristine water in creeks and rivers flowing in similar sandstone bedrock environments and to limited water quality data collected prior to mining. A segment of the Waratah Rivulet, where subsidence and cracking of streambeds and rockbars has occurred, is causing surface water to be redirected into subsurface fracture systems, mix with groundwater already present in the aquifer and partially reappear downstream. This subsurface flow in the shallow fractured sandstone aquifer causes the chemical composition and water quality to change as an effect of water–rock interactions. Salinity, iron, manganese and many cation and anion concentrations increase, whereas oxygen is significantly depleted. Mobilisation of barium and strontium from the rock mass indicates fast chemical dissolution reactions between the subsurface flow and carbonate minerals. Other metals mobilised include zinc, cobalt and nickel. Subsurface water partially discharges from underground receptors downstream of the area impacted by longwall mining. The discharged water is rapidly oxidised by atmospheric oxygen, causing precipitation of iron and manganese oxides / hydroxides out of solution. Hydrogeochemical modelling indicates the dominant iron minerals precipitated out from the water are in this environment goethite, lepidocrocite and ferrihydrite. The paper discusses changes in surface water and groundwater chemistry due to subsurface flow and water–rock interaction, the hydrogeochemical processes responsible for changes in water chemistry, as well as changes in water quality along the rivulet.