Technical Abstract: Soil erosion and sediment transport in agricultural watersheds are highly complicated processes involving a large array of soil properties, surface conditions, and flow regimes. The preponderance of early research on upland areas in agricultural watersheds was motivated by concern for the loss of agriculturally productive soil. During the last 30 years the concerns were extended to include environmental issues especially the contamination and pollution of streams, lakes and ponds by sediment and agri-chemicals. In recent years, there is an increased realization that the subsurface soil water regime may appreciably affect soil erosion processes from hillslope land by causing incipient rilling and gullying, and by the movement of chemical and colloidal constituents into the stream system. This paper examines the role of the subsurface water regime on sediment generation in the upland sediment source areas of watersheds. Specifically, experimental results will be discussed that describe the effect of soil water pressures on the sediment concentration in sediment laden overland flow. Also, exit gradients are determined of subsurface flow into drainage ditches and channels for situations with water levels lower than the groundwater table in the adjoining areas. In this analytical study, a conformal solution approach is sought for a well defined aquifer with known boundary conditions and hydraulic properties. The exit gradients, important in seepage erosion, are determined from the general solution for this case.