The hydrology of the Pecos River valley between Lake McMillan and Carlsbad Springs, Eddy County, N. Mex., is influenced by facies changes in rocks of Permian age. Water stored for irrigation leaks from Lake McMillan into evaporite rocks, principally gypsum, of the Seven Rivers Formation and from Lake Avalon into carbonate rocks of the Tansill Formation. This leakage returns to the Pecos River at Major Johnson Springs and Carlsbad Springs. The river has perennial flow between Major Johnson Springs and Lake Avalon, but it loses water into evaporite rocks of the Yates Formation in this reach. Ground-water movement is generally toward the Pecos River in aquifers in the Pecos River valley except in the Rustler Formation east of the river where it moves southeastward toward playas east of Lake Avalon. The chloride content of ground and surface waters indicates that surface water moves from some reaches of the Pecos River and from surface-storage reservoirs to aquifers and also indicates the degree of mixing of ground and surface waters. About 45,000 acre-feet of ground water is stored in highly permeable rocks in a 3-mile wide part of the Seven Rivers Formation between Lake McMillan and Major Johnson Springs. This water in storage comes from leakage from Lake McMillan and from alluvium north of the springs. The flow of Major Johnson Springs is derived from this aquifer. That part of the flow derived from the alluvium north of the springs averaged 13 cfs (cubic feet per second) from 1953 through 1959 ; about 8 cfs of this flow had not been previously measured at gaging stations on the Pecos River and its tributaries. The most favorable plans for increasing terminal storage of the Carlsbad Irrigation District are to construct a dam at the Brantley site (at the downstream end of Major Johnson Springs), or to use underground storage in the permeable Seven Rivers Formation between Lake McMillan and Major Johnson brings in conjunction with surface storage. To avoid excessive leakage from a reservoir at the Brantley site, the dam should be downstream from all sprints in the Major Johnson Springs area but upstream from a point where the river begin losing water to the Yates Formation.