Soil moisture statistical fractal is an important tool for downscaling remotely-sensed observations and has the potential to play a key role in multi-scale hydrologic modeling. The fractal was first introduced two decades ago, but relatively little is known regarding how its scaling exponents evolve in time in response to climatic forcings. Previous studies have neglected the process of moisture re-distribution due to regional groundwater flow. In this study we used a physically-based surface-subsurface processes model and numerical experiments to elucidate the patterns and controls of fractal temporal evolution in two U.S. Midwest basins. Groundwater flow was found to introduce large-scale spatial structure, thereby reducing the scaling exponents (τ), which has implications for the transferability of calibrated parameters to predict τ. However, the groundwater effects depend on complex interactions with other physical controls such as soil texture and land use. The fractal scaling exponents, while in general showing a seasonal mode that correlates with mean moisture content, display hysteresis after storm events that can be divided into three phases, consistent with literature findings: (a) wetting, (b) re-organizing, and (c) dry-down. Modeling experiments clearly show that the hysteresis is attributed to soil texture, whose "patchiness" is the primary contributing factor. We generalized phenomenological rules for the impacts of rainfall, soil texture, groundwater flow, and land use on τ evolution. Grid resolution has a mild influence on the results and there is a strong correlation between predictions of τ from different resolutions. Overall, our results suggest that groundwater flow should be given more consideration in studies of the soil moisture statistical fractal, especially in regions with a shallow water table.