The Ocotillo-Coyote Wells groundwater basin, located in desert regions of southwest Imperial and southeast San Diego Counties, California, is predominantly underlain by freshwater-bearing alluvium and Plio-Pleistocene sediments of the Palm Spring Formation. Uplift along the Laguna Salada-Elsinore Fault zone has juxtaposed saline water-bearing marine sediments of the Miocene-Pliocene Imperial Formation against the freshwater aquifer. Evaporite deposits in the Palm Spring Formation are also a local source of saline groundwater. Historically, groundwater flow has generally been from the areas of fresh groundwater (i.e., TDS less than 500 mg/l) to the areas of saline groundwater (i.e., TDS greater than 15,000 mg/l). Thus, as long the hydraulic gradient did not reverse in direction, there was no threat of lateral saltwater intrusion into the freshwater supply. Considerable increases in groundwater consumption since the late 1940's, primarily for commercial and industrial use, has generated concern that a reversal in hydraulic gradient could occur and result in lateral saltwater intrusion. A two-dimensional groundwater flow model of the Ocotillo-Coyote Wells Basin was compiled by the USGS to evaluate potential gradient reversals. However, the geology of the basin was inaccurately represented in the model, and groundwater recharge may have been over-estimated by at least a factor of two. Consequently, the geology and groundwater hydrology of the Ocotillo-Coyote Wells Basin was reevaluated. A closer examination of the geology of the Ocotillo-Coyote Wells Basin, via field reconnaissance and electrical resistivity surveys (i.e., Schlumberger soundings and dipole-dipole), revealed that much of the basin previously mapped as alluvium is underlain by Palm Spring Formation covered by a thin veneer of pediment. In addition, numerous covered traces of the Laguna Salada-Elsinore Fault Zone have been delineated. The primary mechanism for groundwater recharge in the Ocotillo-Coyote Wells Basin is runoff from the adjacent Jacumba and Coyote Mountains percolating into the ground at the heads of alluvial fans. Groundwater recharge has been estimated using three different methods: 1) rainfall-runoff correlations in the region; 2) runoff-area correlations for the region; and, 3) the Maxey-Eakin method which is based on a statistical analysis of rainfall-runoff relationships for desert basins in Nevada. The recharge estimate using the Maxey-Eakin method, 1820 ac-ft/yr, is deemed the most accurate. A two-dimensional finite element groundwater flow and contaminant transport model, ISOQUAD II, was modified for unconfined conditions and compiled incorporating the updated basin geology and recharge estimate. Vertical groundwater flow and saltwater-freshwater density differences were not incorporated into the analysis. Numerical modeling indicates that under existing and projected quality groundwater extraction rates, significant water quality degradation is not expected to occur in the Ocotillo-Coyote Wells Basin, except possibly in a local area where commercial groundwater extraction for export to Mexico may result in an influx of saline groundwater. The source of this saline groundwater may be local evaporite lenses, in the Palm Spring Formation.