Although hydraulic groundwater (GW) theory has been recognized as a promising tool for understanding the role of the aquifer(s) in the surface‐subsurface hydrologic cycle, the integrated modeling community still lacks a proper hydrologic structure to apply the well‐studied theory to large‐scale hydrologic predictions. This study aims to present a novel hydrologic structure that enables the Boussinesq equation‐based depiction of the bidirectional stream‐hillslope processes for applying hydraulic GW theory to large‐scale model configurations. We integrated the BE3S's (Hong et al., 2020, https://doi.org/10.1029/2020wr027571) representation scheme of the catchment‐scale stream‐hillslope continuum into the National Water Model (NWM) and applied the modified NWM (i.e., the NWM‐BE3S) to three major basins in Texas (i.e., the Trinity, Brazos, and Colorado River basins). Since the NWM currently relies on a single reservoir model for baseflow simulation, we used the Boussinesq aquifer as an alternative subsurface hydrology routine and evaluated its predictive skill and efficacy. We identified that the implemented Boussinesq aquifer(s) in the NWM‐BE3S yielded noticeable improvements in predicting streamflow for aquifers that exhibited higher nonlinearities in the observed recessions. The varying degree of improvements in streamflow predictions per the recession nonlinearities demonstrated not only (a) the algorithmic enhancement of subsurface hydrology (physics) but also (b) the applicability of the Boussinesq theory‐based depiction of the stream‐hillslope two‐way continuum. We diagnosed each stream's state based on the bidirectional stream‐hillslope exchanges and identified the dominant processes (i.e., river infiltration or baseflow) that were represented spatially in the NWM‐BE3S. Plain Language Summary Streamflow is a critical land hydrologic component to manage water resources and the health of the associated ecosystem. While the water cycle between the stream and hillslope is the key process to accurately simulating streamflow, most currently used hydrologic/land surface models lack a theoretical basis to characterize the catchment‐scale groundwater to depict the stream‐hillslope water cycle. In this paper, we presented a new structure NWM‐BE3S that enables the Boussinesq approximation‐based characterization of the catchment(s) for improving the predictability of streamflow. The NWM‐BE3S was developed by integrating a recent numerical scheme BE3S (Hong et al., 2020, https://doi.org/10.1029/2020wr027571) into the WRF‐Hydro National Water Model (NWM) configuration as an alternative subsurface routing routine. The NWM‐BE3S was tested against streamflow observations from three major basins in Texas (i.e., the Trinity, Brazos, and Colorado River basins) to ensure the applicability of the Boussinesq‐based stream‐hillslope continuum scheme. We identified theory‐consistent improvements in the streamflow predictions from the NWM‐BE3S framework compared to the original NWM. Based on the two‐way fluxes modeled from the hydraulically continuous catchment(s) in the NWM‐BE3S, moreover, about 10% of the river reaches in the three basins were identified as losing streams during the evaluation period. Key Points The Boussinesq theory‐based stream‐hillslope two‐way hydrologic interactions were newly introduced in the National Water Model (NWM) The Boussinesq aquifer yielded improved streamflow predictions than the single bucket model as the nonlinearity of recession increases Gaining or losing reaches in three Texas major basins showed improved predictions using the modified NWM