Stream–subsurface exchange plays a significant role in the fate and transport of contaminants in streams. It has been modelled explicitly by considering fundamental processes such as hydraulic exchange, colloid filtration, and contaminant interactions with streambed sediments and colloids. The models have been successfully applied to simulate the transport of inorganic metals and nutrients. In this study, laboratory experiments were conducted in a recirculating flume to investigate the exchange of a hydrophobic organic contaminant, p,p′‐dichloro‐diphenyl‐dichloroethane (DDE), between a stream and a quartz sand bed. A previously developed process‐based multiphase exchange model was modified by accounting for the p,p′‐DDE kinetic adsorption to and desorption from the bed sediments/colloids and was applied to interpret the experimental results. Model input parameters were obtained by conducting independent small‐scale batch experiments. Results indicate that the immobilization of p,p′‐DDE in the quartz sand bed can occur under representative natural stream conditions. The observed p,p′‐DDE exchange was successfully simulated by the process‐based model. The model sensitivity analysis results show that the exchange of p,p′‐DDE can be sensitive to either the sediment sorption/desorption parameters or colloidal parameters depending on the experimental conditions tested. For the experimental conditions employed here, the effect of colloids on contaminant transport is expected to be minimal, and the stream–subsurface exchange of p,p′‐DDE is dominated by the interaction of p,p′‐DDE with bed sediment. The work presented here contributes to a better mechanistic understanding of the complex transport process that hydrophobic organic contaminants undergo in natural streams and to the development of reliable, predictive models for the assessment of impacted streams. Copyright © 2015 John Wiley & Sons, Ltd.