Palo Verde Valley, California, is an agricultural area in the flood plain of the Colorado River where irrigation water is diverted from the river and groundwater is discharged to a network of drainage ditches and (or) the river. Consumptive use by vegetation and groundwater return flow were calculated using water budgets. Consumptive use by vegetation was 484,000 acre-ft in 1981, 453,600 acre-ft in 1982, 364,400 acre-ft in 1983, and 374,300 acre-ft in 1984. The consumptive-use estimates are most sensitive to two measured components of the water budget, the diversion at Palo Verde Dam and the discharge from drainage ditches to the river. Groundwater return flow was 31,700 acre-ft in 1981, 24,000 acre-ft in 1982, 2,500 acre-ft in 1983, and 7 ,900 acre-ft in 1984. The return-flow estimates are most sensitive to discharge from drainage ditches; various irrigation requirements and crop areas, particularly alfalfa; the diversion at Palo Verde Dam; and the estimate of consumptive use. During increasing flows in the river, the estimate of groundwater return flow is sensitive also to change in groundwater storage. Change in groundwater storage was estimated to be -5,700 acre-ft in 1981, -12,600 acre-ft in 1982, 5,200 acre-ft in 1983, and 11 ,600 acre-ft in 1984. Changes in storage can be a significant component in the water budget used to estimate groundwater return flow but is negligible in the water budget used to estimate consumptive use. Change in storage was 1 to 3% of annual consumptive use. Change in storage for the area drained by the river ranged from 7 to 96% of annual groundwater return flow during the 4 years studied. Consumptive use calculated as diversions minus return flows was consistently lower than consumptive use calculated in a water budget. Water-budget estimates of consumptive use account for variations in precipitation, tributary inflow, river stage, and groundwater storage. The calculations for diversions minus return flows do not account for these components, which can be large enough to affect the estimates of consumptive use. (Author 's abstract)