Actinomycetes can produce significant amounts of the earthy-muddy odour compounds geosmin and 2-methylisoborneol (MIB). These filamentous bacteria are found in both terrestrial and aquatic environments, and are particularly abundant in soil. They can enter freshwater systems via terrestrial runoff and subsequently cause taste and odour outbreaks in drinking water. Since it is well known that actinomycete growth and odour production is modified strongly by environmental factors such as moisture and nutrient levels, we hypothesized that watershed and stream characteristics should influence the potential odour impact of soil runoff on surface water. In this study, 1) the relationship between actinomycete abundance and characteristics such as stream discharge, turbidity and Escherichia coli levels was investigated, and 2) actinomycetes from contrasting terrestrial sources were examined for differences in their geosmin and MIB production. Actinomycetes and stream characteristics were sampled from the Elbow River, an important drinking water source for the City of Calgary (Alberta, Canada), and three tributary streams. Actinomycetes from forested regions and agricultural land were tested for taste and odour compound production. Actinomycete levels in streams were found to correlate closely with E. coli levels and to a lesser extent with turbidity, suggesting that actinomycetes are particularly abundant in runoff from terrestrial sources with fecal contamination. Most of the 18 actinomycete isolates tested were able to produce geosmin and/or MIB regardless of their terrestrial sources, suggesting that taste and odour outbreaks due to actinomycetes may be more influenced by differences in abundance than differences in source.