Forested headwater catchments ensure good water quality for downstream ecosystems and human consumption. Climate change and the exacerbating likelihood of extreme events elevate the risk of severe forest dieback. However, the effects of forest dieback on the quantity and quality of stream water are not fully understood. Here, we analyse high‐frequency observations of discharge, electrical conductivity (EC), dissolved organic carbon (DOC) and nitrate (NO3N) obtained before, during and after a drought‐induced forest dieback in a headwater stream in the German Harz Mountains. We focus on the characteristics of concentration‐discharge (C‐Q) relationships at the scale of runoff events to assess the effects of forest dieback on the sources, mobilisation and pathways of EC, DOC and NO3N. When comparing pre‐ and post‐dieback conditions, we found a significant increase in runoff efficiency and a doubling of DOC loads exported from the catchment, while DOC concentrations increased only moderately and their C‐Q patterns did not change. EC exhibit no changes in concentrations but a steepening of C‐Q dilution patterns. We explain these findings with a dieback‐induced decrease in evapotranspiration, which leads to more intensive drainage of the upper organic soil layers in the riparian zone. In contrast, we observed a strong increase in NO3N concentrations and fluxes by a factor of ~5, while C‐Q patterns at the event scale changed from enrichment to dilution. We argue that the dieback led to an excess of NO3N on the hillslopes that connect to the stream via surficial flowpaths. In this way, NO3N bypasses the riparian zone, reducing the catchment's efficiency in attenuating this nutrient. Our study emphasises the pivotal role of riparian zones in mediating water quality in headwater streams. Different configurations of the riparian zone and its connection to the hillslopes and the stream network may be a missing piece in explaining differences in water quality responses of catchments to forest dieback.