A methodology for evaluating the benefits of urban water resources is developed and applied to three California lakes, Lake Merrit in Oakland, Lake Murray in San Diego, and the Santee Lakes in Santee. Two techniques were used to quantify benefits. Regression analysis and a series of personal interviews were employed to determine how property values were influenced by proximity to an urban water resource. Interviews were also used to determine the additional amount respondents would be willing to pay rather than be excluded from using the resource. This last approach generated estimates of consumer surplus for the water resource. Discounting techniques were then applied to these two benefit streams to derive the present worth of the benefits generated by the lakes. The estimated present values were $41,038,000 for Lake Merritt, $1,439,000 for Lake Murray, and $227,000 for the Santee Lakes. The estimated present values of the resident users' consumer surplus were $4,117,000 for Lake Merritt, $165,000 for Lake Murray, and $273,000 for the Santee Lakes. Numerous tables and graphs elaborate on the calculations and estimates; appendices reproduce the relevant computer regression output and sample interview instruments.