High and variable levels of salinity were investigated in an intermittent stream in a high-rainfall area (∼800 mm/year) of the Mt. Lofty Ranges of South Australia. The groundwater system was found to have a local, upslope saline lens, referred to here as a groundwater salinity ‘hotspot’. Environmental tracer analyses (δ¹⁸O, δ²H, ⁸⁷/⁸⁶Sr, and major elements) of water from the intermittent stream, a nearby permanent stream, shallow and deep groundwater, and soil-water/runoff demonstrate seasonal groundwater input of very saline composition into the intermittent stream. This input results in large salinity increases of the stream water because the winter wet-season stream flow decreases during spring in this Mediterranean climate. Furthermore, strontium and water isotope analyses demonstrate: (1) the upslope-saline-groundwater zone (hotspot) mixes with the dominant groundwater system, (2) the intermittent-stream water is a mixture of soil-water/runoff and the upslope saline groundwater, and (3) the upslope-saline-groundwater zone results from the flushing of unsaturated-zone salts from the thick clayey regolith and soil which overlie the metamorphosed shale bedrock. The preferred theory on the origin of the upslope-saline-groundwater hotspot is land clearing of native deep-rooted woodland, followed by flushing of accumulated salts from the unsaturated zone due to increased recharge. This cause of elevated groundwater and surface-water salinity, if correct, could be widespread in Mt. Lofty Ranges areas, as well as other climatically and geologically similar areas with comparable hydrogeologic conditions.