Determining the mechanisms of runoff generation is essential to land and water resource conservation, but lateral flow processes in high‐relief mountain areas remain unclear due to the difficulty to observe and measure these processes. This study demonstrates that lateral flow in bedrock dominates both high and low flows in a catchment underlain with permeable sedimentary bedrock in the high‐relief Chichibu Mountains. Through measurement of precipitation, discharge, soil, and stream temperatures and tracers (SiO2 and δ18O) in the first‐order stream Bakemonozawa (0.51 km2) and comparison of its water balance with the nested Kawamata catchment (93.58 km2) i, we showed that 831–1012 mm/year or 47%–53% of annual precipitation leaked from Bakemonozawa. The streamflow was discharged from an average depth of 2.3 m or deeper, which were deeper than the measured deepest soil near the gauge. Furthermore, stream temperature decreased significantly during a large summer storm, demonstrating that the relative contribution of the deep bedrock flowpath increased. Large isotopic variation in precipitation was dampened in the stream, suggesting that most baseflow and some higher flows arose from groundwater storage with a constant isotopic ratio due to dispersion and mixing. The discharge–SiO2 relationship suggested at least two groundwater sources, namely, shallow and deep bedrock groundwater, with different runoff responses. Discharge increased dramatically when the catchment became wet, coinciding with the deep bedrock groundwater contribution. Further research is needed to clarify the hydrological characteristics of bedrock.