Removal of ground water by pumping from aquifers may result in compaction of compressible fine-grained beds that are within or adjacent to the aquifers. Compaction of the sediments and resulting land subsidence may be permanent if the head declines result in vertical stresses beyond the previous maximum stress. The process of permanent compaction is not routinely included in simulations of ground-water flow. To simulate storage changes from both elastic and inelastic compaction, a computer program was written for use with the U.S. Geological Survey modular finite-difference ground- water flow model. The new program, the Interbed-Storage Package, is designed to be incorporated into this model. In the Interbed-Storage Package, elastic compaction or expansion is assumed to be proportional to change in head. The constant of proportionality is the product of the skeletal component of elastic specific storage and the thickness of the sediments. Similarly, inelastic compaction is assumed to be proportional to decline in head. The constant of proportionality is the product of the skeletal component of inelastic specific storage and the thickness of the sediments. Storage changes are incorporated into the ground-water flow model by adding an additional term to the right-hand side of the flow equation. Within a model time step, the package appropriately apportions storage changes between elastic and inelastic components on the basis of the relation of simulated head to the previous minimum (preconsolidation) head. Two tests were performed to verify that the package works correctly. The first test compared model-calculated storage and compaction changes to hand-calculated values for a three-dimensional simulation. Model and hand-calculated values were essentially equal. The second test was performed to compare the results of the Interbed-Storage Package with results of the one-dimensional Helm compaction model. This test problem simulated compaction in doubly draining confining beds stressed by head changes in adjacent aquifers. The Interbed-Storage Package and the Helm model computed essentially equal values of compaction. Documentation of the Interbed-Storage Package includes data input instructions, flow charts, narratives, and listings for each of the five modules included in the package. The documentation also includes an appendix describing input instructions and a listing of a computer program for time-variant specified-head boundaries. That package was developed to reduce the amount of data input and output associated with one of the Interbed-Storage Package test problems.