The trend of decreasing permeability with depth was estimated in the fractured-rock terrain of the upper Potomac River basin in the eastern USA using model calibration on 200 water-level observations in wells and 12 base-flow observations in subwatersheds. Results indicate that permeability at the 1–10 km scale (for groundwater flowpaths) decreases by several orders of magnitude within the top 100 m of land surface. This depth range represents the transition from the weathered, fractured regolith into unweathered bedrock. This rate of decline is substantially greater than has been observed by previous investigators that have plotted in situ wellbore measurements versus depth. The difference is that regional water levels give information on kilometer-scale connectivity of the regolith and adjacent fracture networks, whereas in situ measurements give information on near-hole fractures and fracture networks. The approach taken was to calibrate model layer-to-layer ratios of hydraulic conductivity (LLKs) for each major rock type. Most rock types gave optimal LLK values of 40–60, where each layer was twice a thick as the one overlying it. Previous estimates of permeability with depth from deeper data showed less of a decline at <300 m than the regional modeling results. There was less certainty in the modeling results deeper than 200 m and for certain rock types where fewer water-level observations were available. The results have implications for improved understanding of watershed-scale groundwater flow and transport, such as for the timing of the migration of pollutants from the water table to streams.