To better understand storage-runoff dynamics, transient groundwater responses were examined in one of the steep watersheds in British Columbia’s coastal mountains. Streamflow and piezometric data were collected for 1 year to determine the spatial and temporal relations between transient groundwater levels and discharge. Correlations between piezometer responses and lag-time analysis were used to identify and better understand runoff generation mechanisms in this watershed. Results showed a large spatial and temporal variation in transient water table dynamics and indicated that two distinct zones existed: a lower hillslope zone and an upslope zone. Each zone was characterized by very different water table responses. The upper hillslope was disconnected from the stream for the majority of time, suggesting that during most events, it does not directly contribute to streamflow. Piezometers in the lower hillslope zone showed hydrologically limited responses, suggesting rapid subsurface flow, likely through the many macropores and soil pipes. The lag time between peak streamflow and peak groundwater level decreased with increasing antecedent moisture conditions and was more variable for piezometers further away from the stream than for piezometers close to the stream. The study results indicate that a single storage-runoff model is not appropriate for this steep watershed and that a two- or three-compartment model would be more suitable.