Colloids moving from the stream into the hyporheic zone may have a negative impact on aquatic ecosystems as they are potential contaminants or carriers of contaminants. Moreover, retained colloids in the hyporheic zone could not only reduce the exchange flux between the stream and streambed but also change the conditions of the bed, affecting the habitats for aquatic organisms. Previous studies focused on the exchange flux across the sediment–water interface, but the colloid transport processes and distribution of retained colloids in the streambed have received little attention. We conducted experiments within a laboratory flume to examine these processes in a streambed driven by bedform‐induced hyporheic flow. Retained colloids measured in the bed at the end of the experiments revealed colloid retention mainly in the shallow layer of hyporheic zone (0–5 cm below the interface). The results demonstrated significant effects of particle trapping and settling on the colloid transport and distribution in the streambed. Retention leads to the formation of a colloid‐filled shallow layer in the bed. Particle paths based on model simulations showed that colloid settling in pore water modifies the direction of colloid transport and allows the colloid particles to move more deeply in the bed.