With prolonged rainfall, infiltrating wetting fronts in water repellent soils may become unstable, leading to the formation of high-velocity flow paths, the so-called fingers. Finger formation is generally regarded as a potential cause for the rapid transport of water and contaminants through the unsaturated zone of soils. For the first time, field evidence of the process of finger formation and finger recurrence is given for a water repellent sandy soil. Theoretical analysis and model simulations indicate that finger formation results from hysteresis in the water retention function, and the character of the formation depends on the shape of the main wetting and main drainage branches of that function. Once fingers are established, hysteresis causes fingers to recur along the same pathways during following rain events. Leaching of hydrophobic substances from these fingered pathways makes the soil within the pathways more wettable than the surrounding soil. Thus, in the long-term, instability-driven fingers might become heterogeneity-driven fingers. ¿ 1998 American Geophysical Union