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Streams in hot, arid environments often exist as a series of isolated pools along main channels. During these periods, shallow alluvial through flow may strongly influence key ecological processes within pools. We measured diel changes in δ13C values of dissolved inorganic carbon (DIC) and dissolved oxygen (DO) in two pools of ephemeral, dryland streams. We quantified alluvial water connectivity through stable isotope analysis (δ18O and δ2H) of pool and alluvial water. We also estimated gross primary productivity (GPP) and ecosystem respiration (ER) rates across a wider set of pools in both streams. δ13CDIC values displayed regular diel cycles, where both pools displayed small but similar daily amplitude (0.7–0.9‰) despite contrasting amplitudes of change in DO (0.8 mg L−1 vs. 2.8 mg L−1) and contrasting alluvial water connectivity (connected vs. disconnected). Water temperature was the strongest predictor of both δ13CDIC values and rates of change in δ13CDIC across both pools. Across both streams, all pools were net heterotrophic. GPP (0.35–1.73 g O2 m−2 d−1) and ER (0.49–2.64 g O2 m−2 d−1) rates were linked to aquatic vegetation cover. The disconnect between diurnal amplitudes of δ13C values and DO concentrations thus suggests that ecological drivers of gas exchange became increasingly localised as pools contracted. [ABSTRACT FROM AUTHOR]