Increasing numbers of water purveyors are developing conjunctive use projects that involve heavy groundwater extraction during dry years to increase water supply reliability. Many of these projects involve artificial recharge to maximize the amount of water stored in the aquifer during wet years. A recent trend in stormwater management also includes maximizing infiltration. Concurrently, the interaction between streams and aquifers is becoming the focus of intense political, legal, and scientific interest, as evidenced by the California State Water Resources Control Board's recent report by Joseph Sax on the legal classification of groundwater, as well as several court cases. These water resources and water rights-related issues are continuing to escalate with the ever-increasing population and resultant growing demand on water supply. Ironically, there is the possibility that natural groundwater recharge and discharge from significant stretches of major rivers is being reduced by the construction of deep grout cut-off walls associated with river levees. One example is the Lower American River through Sacramento County. In the vicinity of the California State University Sacramento (CSUS) campus, a slurry wall is keyed to a clay layer at a depth of 60 feet. Infiltration would normally occur through the riverbanks and streambed and migrate to deeper water supply aquifers through the heterogeneous fluvial deposits. The slurry wall reduces the volume of sediment available for groundwater/surface water interaction and therefore affects the local hydrology. This stretch of the Lower American River is similar to many other rivers that provide recharge to, or receive discharge from, groundwater basins in the Western U.S. An evaluation of the stream-aquifer interaction was begun on the Lower American River at the CSUS campus, including the effect of the levee cut-off wall on recharge of the aquifer. Several groundwater monitoring wells have been installed perpendicular to the river. The study includes long-term water level surveys, geochemical evaluations, and aquifer testing adjacent to the levee. The study's results will provide an initial indication of whether such levee projects may be inadvertently affecting the water budget of the groundwater basin.