Valle de San Felipe is part of a northwest-trending structural depression extending for over sixty-five miles on the east side of the Sierra San Pedro Martir, northern Baja California, Mexico. Four hundred twenty-five gravity and magnetic observations were completed in the Valle de San Felipe region along with reconnaissance geologic mapping. Analysis of the geophysical anomalies in conjunction with geologic field evidence indicates that Valle de San Felipe is a fault-bounded trough filled with Cenozoic marine and nonmarine sedimentary and volcanic strata. The San Pedro Martir fault on the west side of the valley borders the impressive Sierra San Pedro Martir escarpment. This fault has an apparent minimum vertical separation of 18,000 feet. The eastern border fault has an apparent minimum vertical separation of about 9,000 feet. North of Rancho Santa Clara in the center of Valle de San Felipe the depth to basement from the valley floor is about 8,000 feet. The basement floor appears to be slightly upwarped to the south. To the north, basement depth decreases gently as it approaches the north end of the valley. In the northeast portion of the valley, faulting perpendicular to the major northwest trend is responsible for a large gap in the Sierra San Felipe range. Gravity anomalies indicate a number of buried fault blocks in this embayment. This interpretation is supported by the presence of several inliers of granodiorite. The transverse-trending Agua Blanca fault has its last surface expression north of Canyon San Matías. Geophysical anomalies in the valley do not reflect an extension of the fault to the east. Either the fault dies out as it enters the valley or it has been offset along the San Pedro Martir fault. Evidence for the latter was not observed in the immediate area of Valle de San Felipe. Marine sediments equivalent to the Imperial Formation (Pliocene in age) of the Imperial Valley, California, were mapped just east of San Felipe pass and in the southeastern-most portion of Valle de San Felipe. Due to the complex structural relationships and alluvial cover, it was not possible to determine the extent of the marine sediments. The location of these sediments at an elevation of greater than 1,900 feet indicates that the valley was inundated by a shallow marine sea during the late Cenozoic and has since been elevated. The crystalline complex in the Valle de San Felipe area is composed of pre-batholithic metamorphic screens and quartz diorite and granodiorite batholithic rocks of a Lower Cretaceous or possibly Late Jurrassic age. Cenozoic rocks mapped in the area include fanglomerates, Plio-Pleistocene marine sandstones, Neogene volcanics, and recent alluvium. Regionally the Valle de San Felipe structural trend is aligned with the Sierra Juarez fault to the north and the Sal Si Puedes structure in the Gulf of California to the south. A connection between the Sierra San Pedro Martir fault and the Sal Si Puedes structure is postulated.