Agricultural production of high value crops in Chile's Central Valley is highly dependent on surface water and groundwater, where interactions between the two are likely. Yet hydrological processes in the valley have not been well documented. This research addressed two study questions: (1) What is the effect of irrigation canal seepage on groundwater recharge; and (2) What are the within-valley spatial patterns of river-aquifer interactions. This study was undertaken from 2003 to 2007 in the Peumo Valley in Central Chile. Water levels rose after the onset of the irrigation season associated with irrigation canal seepage. The spatial relationship between river stage and valley shallow aquifer changed from an effluent river at the head of the valley to an influent river at the bottom of the valley. Hydrological limitations on agricultural production in similar areas can be overcome by a system-wide appreciation of the interactions between surface water and groundwater. Copyright © 2008 IAHS Press.