Evidence for spatial variations in soil moisture in natural landscapes is examined in terms of recent theoretical work on shallow subsurface flows driven by topographic gradients. The lateral water fluxes set up conditions across the terrain resulting in variable soil moisture that is relevant to the hydrologic behaviour and management of forests. This paper summarizes current approaches to understanding the behaviour of three-dimensional catchments, and describes modelling strategies being used in research and management especially relevant to forest operations, hydrograph generation, waterlogging, changes in water yield and ecological modelling. A modelling framework for terrain analysis is outlined. The analysis adapts a digital elevation model to the requirements of physical process modelling of subsurface water movement, to characterize the drainage behaviour of terrain of arbitrary complexity. Computations are organized around a natural coordinate system defined by contours and their orthogonals, so that relevant equations are solved along streamtubes, in one dimension only. This simplification has implications both for the complexity of software and the hardware needed to run it. The framework allows the mathematics of individual physical processes to be superposed and integrated across catchments, and suggests that relative soil moisture status, as well as waterlogging, can be predicted fairly easily. Linkages between the design of field process studies and the overall modelling strategy are proposed. © 1990.