A coupled inversion of transient pressure observations and surface displacement measurements provides an efficient technique for estimating subsurface permeability variations. The methodology has the advantage of utilizing surface observations, which are typically much less expensive than measurements requiring boreholes. Furthermore, unlike many other geophysical observables, the relationship between surface deformation and reservoir pore fluid volume changes is relatively well understood. Our treatment enables us to partition the estimation problem into a sequence of three linear subproblems. An application of the approach to a set of tilt and borehole pressure data from the Raymond field site in California illustrates its efficiency and utility. The observations are associated with a well test in which fluid is withdrawn from a shallow fracture zone. During the test, 13 tiltmeters recorded the movement of the ground surface. Simultaneously, nine transducers measured pressure changes in boreholes intersecting the fracture system. We are able to image a high permeability, north trending channel located within the fracture zone. The existence and orientation of this high-permeability feature is substantiated by a semiquantitative analysis of some 4000 transient pressure curves. ¿ 2001 American Geophysical Union