A method based on an optimal nonlinear filtering technique is proposed and tested for the determination of the hydraulic conductivity function from a field drainage experiment. Simplifications to Richard's equation lead to a Langevin type differential equation to describe the redistribution of stored water as a function of drainage flux excited by a random initial condition and state forcing. The derived equation is then utilized in an optimal estimation scheme that explicitly accounts for the formulation and observation uncertainty in determining the hydraulic conductivity parameters. A field drainage experiment was carried out to study the usefulness of the proposed method for routine in situ hydraulic conductivity function estimation. ¿ American Geophysical Union 1993