The authors analyzed data from Section 404 permits issued in Texas and Arkansas from 1982 through 1986 that required compensatory mitigation for alteration of freshwater wetlands. The location, area, wetland type, and other data describing the impacted and compensatory wetlands were compiled and analyzed. Information contained in the permit record was analyzed. No judgement was made as to whether there was compliance with the terms of the permit or whether the compensated wetland replaced the ecological functions of the wetland destroyed. Losses of wetland functions associated with wildlife and fisheries habitat most commonly were documented. Accurate reporting of the effect of Section 404 permits on the wetland area was difficult for a number of reasons. For example, no area information was listed in the permit record for 14 percent of the impacted wetlands and seven percent of the compensated wetlands.