Flood processes no longer actively increase the planform area of terraces. Instead, lateral erosion decreases the area. However, infrequent extreme floods continue episodic aggradation of terraces surfaces. We quantify this type of evolution of terraces by an extreme flood in May 1978 on Powder River in southeastern Montana. Within an 89-km study reach of the river, we (1) determine a sediment budget for each geomorphic feature, (2) interpret the stratigraphy of the newly deposited sediment, and (3) discuss the essential role of vegetation in the depositional processes. Peak flood discharge was about 930??m3 s- 1, which lasted about eight??days. During this time, the flood transported 8.2??million tons of sediment into and 4.5??million tons out of the study reach. The masses of sediment transferred between features or eroded from one feature and redeposited on the same feature exceeded the mass transported out of the reach. The flood inundated the floodplain and some of the remnants of two terraces along the river. Lateral erosion decreased the planform area of the lower of the two terraces (~ 2.7??m above the riverbed) by 3.2% and that of the higher terrace (~ 3.5??m above the riverbed) by 4.1%. However, overbank aggradation, on average, raised the lower terrace by 0.16??m and the higher terrace by 0.063??m. Vegetation controlled the type, thickness, and stratigraphy of the aggradation on terrace surfaces. Two characteristic overbank deposits were common: coarsening-upward sequences and lee dunes. Grass caused the deposition of the coarsening-upward sequences, which had 0.02 to 0.07??m of mud at the base, and in some cases, the deposits coarsened upwards to coarse sand on the top. Lee dunes, composed of fine and very fine sand, were deposited in the wake zone downstream from the trees. The characteristic morphology of the dunes can be used to estimate some flood variables such as suspended-sediment particle size, minimum depth, and critical shear velocity. Information about depositional processes during extreme floods is rare, and therefore, the results from this study aid in interpreting the record of terrace stratigraphy along other rivers.