Water resources programs conducted by the U.S. Geological Survey in the state of North Carolina during 1985 and proposed programs for 1986 are described. This is the first in a series of biennial progress reports on Survey activities in the state. Activities such as gathering, interpreting and publishing hydrologic data and scientific information in support of state and local water resources planning, management, and regulatory programs are presented. The water resources programs described are funded through cooperative agreements with state and local agencies and through special agreements with other federal agencies. Cooperative programs are reviewed annually to insure that state, local and national priorities are being met. Groundwater withdrawals are estimated to have produced water level declines of 150 ft and more for large areas of the northeast and central Coastal Plain. Future demands for water quality and quantity are discussed.