The South Caspian basin contains both sands and shales that have pore-fluid pressures substantially in excess of hydrostatic fluid pressure. Pore-pressure data from the South Caspian basin demonstrate that large differences in excess hydraulic head exist between sand and shale. The data indicate that sands are acting as drains for overlying and underlying compacting shales and that fluid flows laterally through the sand on a regional scale from the basin interior northward to points of discharge. The major driving force for the fluid movement is shale compaction. We present a first- order mathematical analysis in an effort to test if the permeability of the sands required to support a regional flow system is reasonable. The results of the analysis suggest regional sand permeabilities ranging from 1 to 30 md; a range that seems reasonable. This result supports the thesis that lateral fluid flow is occurring on a regional scale within the South Caspian basin. If vertical conduits for flow exist within the basin, they are sufficiently impermeable and do not provide a major outlet for the regional flow system. The lateral fluid flow within the sands implies that the stratigraphic sequence is divided into horizontal units that are hydraulically isolated from one another, a conclusion that has important implications for oil and gas migration.-Authors