Coastal storms and sea-level rise will increase seawater flooding and saltwater intrusion in low-elevation coastal zones, such as small islands. High sea levels can elevate inland water tables via ocean-aquifer connections and cause groundwater flooding and salinization hazards. These subsurface hazards are often overlooked, but can intensify freshwater security challenges and drive ecosystem transgressions. Here, we use new field data and numerical simulations of groundwater flow and solute transport to evaluate how heavy rainfall, storm surge, and seawater infiltration during Hurricane Fiona (September 2022) and future sea-level rise impact beach and inland groundwater levels, freshwater pond areas, and saltwater intrusion on Sable Island National Park Reserve, Canada. Field data reveal heavy rainfall during Hurricane Fiona increased groundwater and pond levels before seawater flooded the beach. Seawater infiltration on flooded, low-elevation beaches caused a 1.8 m rise in beach groundwater levels, which in turn increased pond levels by 0.12 m without direct inputs from precipitation or seawater. Model simulations demonstrate that seawater infiltration on beaches flooded the subsurface and drove the observed inland groundwater rise that expanded the area of freshwater ponds by 174%. Simulations of projected sea-level rise show that seawater inundation will only flood a small area of land along the coast, while inland groundwater flooding may inundate up to 30 times more land area. Groundwater rise and flooding driven by sea-level rise decrease hydraulic gradients and increase saltwater intrusion via freshwater lens contraction. Together, results demonstrate that seawater inundation and sea-level rise paradoxically cause concurrent fresh surface water expansion but subsurface freshwater lens contraction. Our results provide new insights into drivers of spatiotemporal dynamics of island freshwater resources and highlight that unseen and often overlooked groundwater-surface water exchanges are critical for evaluating coastal flooding and groundwater salinization hazards in an age of intense storms and rising seas.