Seepage processes are usually neglected in bank stability analyses although they can become a prominent failure mechanism under certain field conditions. This study incorporated the effects of seepage (i.e., seepage gradient forces and seepage erosion undercutting) into the Bank Stability and Toe Erosion Model (BSTEM) and evaluated the importance of the seepage mechanisms on bank stability. The effects of the seepage force were incorporated into BSTEM by modifying the force balance. Seepage erosion undercutting was simulated using a recently proposed sediment transport function. The modified BSTEM was then used to evaluate the stability of a streambank along Little Topashaw Creek under different scenarios: (1) without seepage forces and undercutting, (2) with seepage forces only, (3) with seepage undercutting only, and (4) with both seepage forces and undercutting. For a condition where the bank was fully saturated, the factor of safety (FS) decreased by as much as 66% (i.e., FS decreased from 2.68 to 0.91) from that of a dry condition due to the decrease in the factional strength of the soil as the pore-water pressure increased. Incorporating the effects of the seepage force resulted in an average decrease in the FS of approximately 30 to 50% for all water table depths. Seepage erosion undercutting reduced the FS by approximately 6% for a 5 cm undercut (i.e., 2% of the bank height) and 11% for a 10 cm undercut (i.e., 3.3% of the bank height) due to the loss of supporting material in the conductive layer. Seepage erosion undercutting required 15 to 20 cm of seepage undercut to become the dominant failure mechanism over seepage forces and pore-water pressure effects. The cumulative effects of seepage reduced this streambank's FS by up to 63% when the water table reached the entire bank height. The development of a bank stability model capable of simulating seepage processes was necessary in order to better understand site-specific failure mechanisms.