Shoaling in the Gulf Intracoastal Waterway of Laguna Madre, Tex., is caused primarily by recycling of dredged sediments. Sediment recycling, which is controlled by water depth and location with respect to the predominant wind-driven currents, is minimal where dredged material is placed on tidal flats that are either flooded infrequently or where the water is extremely shallow. In contrast, nearly all of the dredged material placed in open water >1.5 m deep is reworked and either transported back into the channel or dispersed into the surrounding lagoon. A sediment flux analysis incorporating geotechnical properties demonstrated that erosion and not postemplacement compaction caused most sediment losses from the placement areas. Comparing sediment properties in the placement areas and natural lagoon indicated that the remaining dredged material is mostly a residual of initial channel construction. Experimental containment designs (shallow subaqueous mound, submerged levee, and emergent levee) constructed in high-maintenance areas to reduce reworking did not retain large volumes of dredged material. The emergent levee provided the greatest retention potential approximately 2 years after construction.