Large-scale open storage of wood mulch is common practice at wood recycling facilities. During rain and snow melt, leachate with soluble compounds and suspended particles is released from mulch stockpiles. The objective of this study was to determine the quality of leachate/runoff from wood recycling facilities to evaluate its potential to contaminate receiving waterbodies. Wood mulch (n = 30) and leachate/runoff (n = 26) samples were collected over 1.5 years from three wood recycling facilities in New Jersey, USA. Differences by site were found (p < 0.05) for most of the 21 constituents tested in the solid wood mulch samples. Biochemical oxygen demand (range <20–3000 mg/L), chemical oxygen demand (134–6000 mg/L) and total suspended solids (69–401 mg/L) median concentrations of the leachate/runoff samples were comparable to those of untreated domestic wastewater. Total Kjeldahl N, total P and fecal coliform median values were slightly lower than typical wastewater values. Dose-response studies with leachate/runoff samples using zebrafish (Danio rerio) embryos showed that mortality and developmental defects typically did not occur even at the highest concentration tested, indicating low toxicity, although delayed development did occur. Based on this study, leachate/runoff from wood recycling facilities should not be released to surface waters as it is a potential source of organic contamination and low levels of nutrients. A study in which runoff from a controlled drainage area containing wood mulch of known properties is monitored would allow for better assessment of the potential impact of stormwater runoff from wood recycling facilities.