1. Microbial heterotrophic activity is a major driver of nutrient and organic matter processing in the hyporheic zone of headwater streams. Additionally, the hyporheic zone might provide refuge for microbes when surface flow ceases during drought events. 2. We investigated chemical (organic and inorganic nutrients) and microbiological parameters (bacterial cell concentration, live–dead ratios, and extracellular enzyme activities) of surface and interstitial pore water in a period of progressive surface‐hyporheic disconnection due to summer drying. The special situation of the chosen study reach, where groundwater mixing is impeded by the bedrock forming a natural channel filled with sediment, allowed as to study the transformation of these parameters along hyporheic flow paths. 3. The chemical composition of the hyporheic pore water reflected the connectivity with the surface water, as expressed in the availability of nitrate and oxygen. Conversely, microbiological parameters in all hyporheic locations were different from the surface waters, suggesting that the microbial activity in the water changes rapidly once the water enters the hyporheic zone. This feature was principally manifested in higher live–dead ratios and lower leucine aminopeptidase (an activity related to nitrogen acquisition) in the hyporheic pore waters. 4. Overall, bacterial cell concentration and extracellular enzyme activities increased along hyporheic flow paths, with a congruent decrease in inorganic nutrients and dissolved organic matter quantity and apparent molecular size. 5. Our findings show two important functions of the hyporheic zone during drought: (1) deeper (−50 cm) water‐saturated layers can act as a refuge for microbial activity; and (2) the hyporheic zone shows high rates of carbon and nitrogen turnover when water residence times are longer during drought. These rates might be even enhanced by an increase in living microbes in the remaining moist locations of the hyporheic zone.