AbstractDissolved organic carbon (DOC) is a key component of the global carbon cycle, but, to date, large uncertainties still exist on its source and fate in first‐order streams. In a 23 ha rangeland and steep‐slope headwater of South Africa, our aim was to quantify the contribution of overland flow (OF), soil water (SW) and ground water (GW) to DOC fluxes (DOCF), and to interpret the results in terms of DOC sources and fate. The average 2010–2011 DOC concentration (DOCC) at the catchment outlet was 4.7 mg C l−1 with a standard error of ±2.5 mg C l−1, which was significantly lower than in SW (15.2 ± 1.6 mg C l−1) and OF (11.9 ± 0.8 mg C l−1), but higher than in GW (2.3 ± 0.6 mg C l−1). Based on end‐member mixing using Si and Na concentration in the water compartments, the average SW contribution to DOCF was 66.4%, followed by OF (30.0%) and GW (3.6%). The resulting estimated DOCF at the catchment outlet was 8.05 g C m2 y−1. This was much higher than the observed value of 2.80 g C m2 y−1, meaning that 5.25 g C m2 y−1 or 65% of the DOC is lost during its downslope and/or downstream transport to the catchment outlet. Complementary investigations revealed that the DOCC in SW dropped from 15.2 ± 1.6 to 2.6 ± 0.3 mg C l−1 during its downslope transport to the river system, which corresponded to a net loss of 5.10 g C m2 y−1, or 97% of the catchment DOC losses. These results on DOC sources and potential fate in headwaters are expected to improve our understanding of the impact of hydrology on the global C‐cycle. Copyright © 2013 John Wiley & Sons, Ltd.