Mount Cardigan lies on the divide between the Connecticut River and Merrimack River watersheds. The western slopes of the mountain drain to Orange Brook towards the town of Canaan, then via the Indian River to the Mascoma River, the Connecticut River, and ultimately Long Island Sound. The south slopes of the mountain flow via Mill Brook to the Smith River, a tributary of the Pemigewasset and Merrimack rivers, ultimately flowing to the Gulf of Maine. The eastern slopes of Mount Cardigan drain via Brock, Clark, and Davis brooks to the Fowler River, then via Newfound Lake and the Newfound River to the Pemigewasset. Atwell Brook flows off a northeastern ridge of the mountain, draining via the Cockermouth River to Newfound Lake. The farthest north ridge of Cardigan is drained by the South Branch of the Baker River, with water flowing north to the Baker River in Rumney before turning east to reach the Pemigewasset in Plymouth.