Pilot points for parameter estimation were creatively used to address heterogeneity at both the well field and regional scales in a variable-density groundwater flow and solute transport model designed to test multiple hypotheses for upward migration of fresh effluent injected into a highly transmissive saline carbonate aquifer. Two sets of pilot points were used within in multiple model layers, with one set of inner pilot points (totaling 158) having high spatial density to represent hydraulic conductivity at the site, while a second set of outer points (totaling 36) of lower spatial density was used to represent hydraulic conductivity further from the site. Use of a lower spatial density outside the site allowed (1) the total number of pilot points to be reduced while maintaining flexibility to accommodate heterogeneity at different scales, and (2) development of a model with greater areal extent in order to simulate proper boundary conditions that have a limited effect on the area of interest. The parameters associated with the inner pilot points were log transformed hydraulic conductivity multipliers of the conductivity field obtained by interpolation from outer pilot points. The use of this dual inner-outer scale parameterization (with inner parameters constituting multipliers for outer parameters) allowed smooth transition of hydraulic conductivity from the site scale, where greater spatial variability of hydraulic properties exists, to the regional scale where less spatial variability was necessary for model calibration. While the model is highly parameterized to accommodate potential aquifer heterogeneity, the total number of pilot points is kept at a minimum to enable reasonable calibration run times.