In late 1988, parallel studies of Lake Five‐O (pH 5.14) in the Florida panhandle and Lake Barco (pH 4.50) in north central Florida were initiated to develop hydrologic and major ion budgets of these lakes as part of an overall effort to improve understanding of the hydrologic, depositional, and biogeochemical factors that control acid‐neutralizing capacity (ANC) in seepage lakes. Preliminary findings from these studies indicate that earlier perceptions of lake hydrology and mechanisms of ANC regulation in Florida seepage lakes may have to be revised. The traditional perspective of seepage lakes in the Florida panhandle views these systems as dominated by precipitation inputs and that ANC regulation is due largely to in‐lake processes. Our results for Lake Five‐O show modest to steep hydraulic gradients almost entirely around the lake. In addition, the horizontal hydraulic conductivity of the surficial aquifer is high (8–74 m day⁻¹), indicating that large quantities of groundwater flow into Lake Five‐O. Calculations of net groundwater flow from hydrologic budgets also indicate that groundwater may comprise at least 38 to 46% of the total inflow. For Lake Barco, net flow estimates of the minimum groundwater inflow range from 5 to 14% of total inflow. Enrichment factor and ion flux calculations for Lake Five‐O and Lake Barco indicate that terrestrial as well as in‐lake processes contribute significantly to ANC regulation. The extent that terrestrial processes contribute to ANC generation is directly related to the magnitude of groundwater inflow as well as the degree of ion enrichment or depletion that occurs in the surficial aquifer. Net ANC generation in both study lakes was dominated by anion retention (NO₃⁻ and SO₄²⁻). Where previous studies concluded that in‐lake reduction was the primary sink for SO₄²⁻, our preliminary calculations show that adsorption of SO₄²⁻ within the watershed is perhaps twice as important as in‐lake reduction as a source of ANC. Net base cation enrichment in both lakes was negligible.