The purpose was to analyze the methods currently used in the evaluation of the benefits and costs of multipurpose water resource projects to recommend changes. The study was carried out by analyzing three completed multipurpose water projects: the Pine Flat Dam and Reservoir near Fresno, the Santa Maria Project near Santa Maria, and the Trinity River Division of the Central Valley Project near Redding (all in California). This group includes projects developed for providing flood protection, supplies of irrigation water, municipal and industrial water supplies, hydroelectric power, fish and wildlife habitats, and recreation. The study basically followed the structure of a benefit-cost analysis of the projects. Particular attention was paid to many environmental impacts which were improperly treated in the original plans for development. The principal recommendation to improve water project evaluation is the extension of analysis beyond the fundamental benefit-cost analysis to include many crucial impacts which are not quantifiable in monetary terms.