Shrub encroachment has been a worldwide phenomenon, but the interactions between the surface hydrological cycle and the shrub-encroached landscape at different hillslope positions remain poorly investigated. The present study was undertaken to explore the interactions between the water infiltration patterns affected by shrub encroachment. At four slope positions of a hillslope encroached by Caragana microphylla Lam, soil water content and temperature were continuously measured at 10-min intervals at four or five depths in both the presence (shrub patches) and absence (grass matrix) of shrubs. Then, the infiltration of rainfall and meltwater was estimated based on analyses of the above data. The rainfall infiltration ratios (IRs) of grass matrix were as high as 0.78 ± 0.08, except at the lower site, which had a value of only 0.47. The IRs of shrub patches increased from 0.38 at the top site to 0.77 at the lower site. In snowy years, snow and ice were blown upward by wind and accumulated in the shrub patches and their leeward areas, which resulted in higher water input for the shrub patches than for the grass matrix. Shrub encroachment changed the microtopography and soil properties of the hillslope and further affected the surface hydrological processes. The feedbacks between shrub encroachment and water infiltration varied among sites of the hillslope, which may in turn have affected the development of shrub patches.