Airborne electromagnetic (AEM) dataare usedto estimate large-scale model structural geometry, i.e. the spatial distribution of different lithological units based on assumed or estimated resistivity-lithology relationships, and the uncertainty in those structures given imperfect measurements. Geophysically derived estimates of model structural uncertainty are then combined with hydrologic observations to assess the impact of model structural error on hydrologic calibration and prediction errors. Using a synthetic numerical model, we describe a sequential hydrogeophysical approach that: (1) uses Bayesian Markov chain Monte Carlo (McMC) methods to produce a robust estimate of uncertainty in electrical resistivity parameters, (2) combines geophysical parameter uncertainty estimates with borehole observations of lithology to produce probabilistic estimates of model structural uncertainty over the entire AEM survey area using geostatistical sequential indicator simulation algorithms, and (3) uses model structural estimates along with hydrologic observations to quantify both hydrologic parameter and prediction uncertainty using a second McMC sampling algorithm. Results of simulations will be presented that illustrate the complete workflow from geophysical parameter uncertainty analysis to the impact of model structural uncertainty on hydrologic parameter estimates.