A 3‐year study was conducted on Austin clay at Temple, Texas, to determine the effect of mulches of straw, gravel, and soil treated with dioctadecyl dimethyl ammonium chloride (DDAC) on runoff, erosion, and evaporation. Mulches were applied to 0.01‐acre plots on a 4% slope. Plots were fallowed 2 years and planted in grain sorghum (Sorghum vulgare) the third year. Runoff and erosion were greater from DDAC‐treated soil than from bare‐check soil. A surface cover of straw or gravel reduced runoff significantly and essentially eliminated erosion. Both the 2‐inch straw mulch and the bare DDAC‐treated soil reduced evaporation significantly from the 0‐ to 6‐inch depth during a hot, rainless 10‐day period. Straw, gravel, and DDAC‐treated soil mulches were about equally effective in evaporation control over periods of a month or more. During high rainfall periods, straw and gravel mulches increased infiltration and movement of excess water below 54 inches. The effect of chemical treatments on runoff and erosion should be considered in addition to their ability to reduce evaporation of soil moisture.