Shallow landslides induced by rainfall are among the most costly and deadly natural hazards, which mostly afflict mountainous and steep terrain regions. Crucial role in the initiation of these events is attributed to subsurface hydrology and how changes in the soil water regime can affect significantly the soil shear strength. Rainfall infiltration results in a decrease of matric suction, which is followed by a rapid drop in apparent cohesion. Especially on steep slopes in shallow soils, this loss of shear strength can lead to failure even in the unsaturated zone before positive water pressures are developed. Evidently, fundamental elements for an efficient prediction of rainfall-induced landslides are the interdependence of shear strength and suction, as well as the temporal evolution of suction during the wetting and drying process. A distributed physically based model, raster-based and continuous in space and time, was developed in order to investigate the interactions between surface and subsurface hydrology and shallow landslides initiation. In this effort emphasis is given to the modelling of the temporal evolution of hydrological processes and their triggering effects to soil slip occurrences. Specifically, the 3D variably saturated flow through soil and the resulting water balance is modelled using the Cellular Automata concept. Evapotranspiration, root water uptake and soil hydraulic hysteresis are taken into account for the continuous simulation of soil water content during storm and inter-storm periods. A multidimensional limit equilibrium analysis is utilized for the computation of the stability of every cell by taking into account the basic principles of unsaturated soil mechanics. A test case of a serious and diffused in space landslide event in Switzerland is investigated for the verification of the model.