Hyporheic exchange (mixing of stream water with pore water beneath the stream) is responsible for the transport of many ecologically relevant substances across the stream-subsurface interface. This process is dependent on both the streamflow conditions and sedimentary properties, but the complex nature of fluvial systems has presented a barrier to the development of mechanistic understanding of the dynamics of stream-subsurface interactions. This work presents the results of a controlled study to examine in detail the relationship between stream-subsurface exchange fluxes, delivery of suspended sediments to the hyporheic region, fine particle accumulation in the streambed, and alteration of sedimentary properties. Laboratory flume experiments were used to observe kaolinite clay deposition in a sand bed and the resulting alteration of hyporheic exchange fluxes. Solute and suspended sediment exchange with clean sand beds is predicted well by a fundamental model for bed form-driven advective pumping exchange. However, substantial accumulation of clay in the bed causes an alteration of the pore water flow environment, which reduces both water flux across the stream-subsurface interface and subsequent particle deposition. Measurement of bulk solute exchange and direct observation of clay accumulation in the bed both indicate that transported fine particles are preferentially removed near the stream-subsurface interface. Clogging of inflow regions produces heterogeneous subsurface clay deposits even when the bed is initially homogeneous. This behavior is also predicted by the fundamental colloid pumping model. These results contradict the accepted view that suspended sediments will generally deposit in the deepest regions of the bed and thus clog the bed from the bottom upward. Our results indicate that clogging of the streambed surface will often isolate deeper regions of the bed from the streamflow, so that even relatively low amounts of suspended sediments can substantially degrade streambed habitat.