The distribution and persistence of water repellence was altered by low severity fire and subsequent rain in soil supporting eucalypt woodland on sandstone terrain in Sydney, south-eastern Australia. Water drop penetration times were recorded to depths of 0.08 m in situ 9 months before the experimental fire, immediately after fire, 4 weeks later when rainfall had modified the soil surface but the soil was dry, and 5 weeks after the fire when the soil was moist. Spatial variation in water repellence was high in all cases except immediately after the fire, when soil was almost uniformly strongly repellent to 0.03 m depth, and less uniformly repellent at 0.04–0.06 m depth. Heavy rain moved litter, ash, and mineral soil, modifying the soil surface into microtopographic units including litter dams, microterraces, and other areas with differing proportions of litter, bare soil, and gravel. Post-rain water drop penetration measurements were taken on and beneath these different surface conditions, in order to investigate the possible contribution of water repellence to the formation and maintenance of litter dams and microterraces characteristic of this terrain after fire. Water repellence did not appear to be directly correlated with the presence or absence of surface litter. Results suggest the long-term and spatially variable water repellence found in soils associated with vegetation dominated by eucalypts in Australia is maintained by factors different from those causing extreme and uniform water repellence after fire. Variable water repellence at the soil surface and within the profile may contribute to differential survival of seedlings after fire. The possible breakdown of water repellent compounds formed after fire and the distribution and development of hydrophobic biotic structures including fungal hyphae and proteoid roots need to be investigated.