Urban land use change is associated with decreased soil-mediated ecosystem services, including stormwater runoff mitigation and carbon (C) sequestration. To better understand soil structure formation over time and the effects of land use change on surface and subsurface hydrology, we quantified the effects of urban land development and subsequent soil rehabilitation on soil aggregate size distribution and aggregate-associated C and their links to soil hydraulic conductivity. Four treatments [typical practice (A horizon removed, subsoil compacted, A horizon partially replaced), enhanced topsoil (same as typical practice plus tillage), post-development rehabilitated soils (compost incorporation to 60-cm depth in subsoil; A horizon partially replaced plus tillage), and pre-development (undisturbed) soils] were applied to 24 plots in Virginia, USA. All plots were planted with five tree species. After five years, undisturbed surface soils had 26 to 48% higher levels of macroaggregation and 12 to 62% greater macroaggregate-associated C pools than those disturbed by urban land development regardless of whether they were stockpiled and replaced, or tilled. Little difference in aggregate size distribution was observed among treatments in subsurface soils, although rehabilitated soils had the greatest macroaggregate-associated C concentrations and pool sizes. Rehabilitated soils had 48 to 171% greater macroaggregate-associated C pool than the other three treatments. Surface hydraulic conductivity was not affected by soil treatment (ranging from 0.4 to 2.3cmh−1). In deeper regions, post-development rehabilitated soils had about twice the saturated hydraulic conductivity (14.8 and 6.3cmh−1 at 10–25cm and 25–40cm, respectively) of undisturbed soils and approximately 6–11 times that of soils subjected to typical land development practices. Despite limited effects on soil aggregation, rehabilitation that includes deep compost incorporation and breaking of compacted subsurface layers has strong potential as a tool for urban stormwater mitigation and soil management should be explicitly considered in urban stormwater policy.