We present a new method of determining an operating policy for a multireservoir system in which the operating policy for a reservoir is determined by solving a stochastic dynamic programming model consisting of that reservoir and a two-dimensional representation of the rest of the system. The method is practical for systems with many reservoirs because the time required to determine an operating policy only increases quadratically with the number of reservoirs in the system and because the operating policy for a reservoir is a function of few variables. We apply the method to examples of multireservoir systems with between 3 and 17 reservoirs and show that the operating policies determined are very close to optimal.¿ 1997 American Geophysical Union