This work focuses on the geochemical processes taking place in the acid drainage in the Ribeira da Água Forte, located in the Aljustrel mining area in the Iberian Pyrite Belt. The approach involved water and stream sediment geochemical analyses, as well as other techniques such as sequential extraction, Mössbauer spectroscopy, and X-ray diffraction. Ribeira da Água Forte is a stream that drains the area of the old mine dumps of the Aljustrel mine, which have for decades been a source of acid waters. This stream flows to the north for a little over than 10km, but mixes with a reduced, organic-rich, high pH waste water from the municipal waste water pools of the village. This water input produces two different results in the chemistry of the stream depending upon the season: (i) in the winter season, effective water mixing takes place, and the flux of acid water from the mine dumps is continuous, resulting in the immediate precipitation of the Fe from the acid waters; (ii) during the summer season, acid drainage is interrupted and only the waste water feeds the stream, resulting in the reductive dissolution of Fe hydroxides and hydroxysulfates in the stream sediments, releasing significant quantities of metals into solution. Throughout the year, water pH stays invariably within 4.0–4.5 for several meters downstream of this mixing zone even when the source waters come from the waste water pools, which have a pH around 8.4. The coupled interplay of dissolution and precipitation of the secondary minerals (hydroxides and sulfates), keeps the system pH between 3.9 and 4.5 all along the stream. In particular, evidence suggests that schwertmannite may be precipitating and later decomposing into Fe hydroxides to sustain the stream water pH at those levels. While Fe content decreases by 50% from solution, the most important trace metals are only slightly attenuated before the solution mixes with the Ribeira do Rôxo stream waters. Concentrations of As are the only ones effectively reduced along the flow path. Partitioning of Cu, Zn and Pb in the contaminated sediments also showed different behavior. Specific/non-specific adsorption is relevant for Cu and Zn in the upstream branch of Ribeira da Água Forte with acid drainage conditions, whereas the mixture with the waste water causes that the association of these metals with oxyhydroxide to be more important. Metals bound to oxyhydroxides are on the order of 60–70% for Pb, 50% for Cu and 30–60% for Zn. Organic matter is only marginally important around the waste water input area showing 2–8% Cu bound to this phase. These results also show that, although the mixing process of both acid and organic-rich waters can suppress and briefly mitigate some adverse effects of acid drainage, the continuing discharge of these waste waters into a dry stream promotes the remobilization of metals fixed in the secondary solid phases in the stream bed back into solution, a situation that can hardly be amended back to its original state.