Gastrointestinal illness (GI) has been associated with heavy rainfall. Storm events and periods of heavy rainfall and runoff can result in increased microbiological contaminants in raw water. Surface water supplies are open to the environment and runoff can directly influence the presence of contaminants. A time-stratified bi-directional case-crossover study design was used to estimate associations of heavy rainfall and hospitalizations for GI. Cases of GI were identified as in-patient hospitalization with a primary diagnosis of infectious disease associated diarrhea [ICD-9 codes: specified gastrointestinal infections 001-009.9 or diarrhea 787.91] among the residents of New Jersey from 2009 to 2013 resulting in a final sample size of 47,527 cases. Two control days were selected on the same days of the week as the case day, within fixed 21-day strata. Conditional logistic regression was used to estimate odds ratios controlling for temperature and humidity. To determine potential effect modification estimates were stratified by season (warm or cold) and drinking water source (groundwater, surface water, or 'other' category). Stratified analyses by drinking water source and season identified positive associations of rainfall and GI hospitalizations in surface water systems during the warm season with no lag (OR = 1.12, 95% CI 1.05-1.19) and a 2-day lag (OR = 1.09, 95% CI 1.03-1.16). Positive associations in 'Other' water source areas (served by very small community water systems, private wells, or unknown) during the warm season with a 4-day lag were also found. However, there were no statistically significant positive associations in groundwater systems during the warm season. The results suggest that water systems with surface water sources can play an important role in preventing GI hospitalizations during and immediately following heavy rainfall. Regulators should work with water system providers to develop system specific prevention techniques to limit the impact of heavy rainfall on public health.