The effects of transverse hydrodynamic dispersion on altering transformation-induced compound-specific isotope analysis (CSIA) signals within groundwater pollution plumes have been assessed with reactive transport modeling accommodating diffusion-induced isotope fractionation (DIF) and implementing different parameterizations of local transverse dispersion. The model reproduced previously published field data showing a negative carbon isotope pattern (−2 ‰) at the fringes of a nondegrading PCE plume. We extended the study to reactive transport scenarios considering vinyl chloride as a model compound and assessing, through a detailed sensitivity analysis, the coupled effects of transverse hydrodynamic dispersion (with and without DIF) and aerobic fringe degradation on the evolution of carbon and chloride isotope ratios. Transformation-induced positive isotope signals were increasingly attenuated with distance from the source and higher degradation rate. The effect of DIF on the overall isotope signal attenuation was greatest near the source and for low values of groundwater flow velocity, transverse dispersion coefficient, molecular weight, rate constant, and isotope fractionation factor, α, of the degradation reaction. Models disregarding DIF underestimate the actual α. The approximately twice larger DIF effect for chlorine than for carbon together with the low α for oxidation resulted in strong chlorine CSIA depletions for VC at the plume fringe.