Lake Belle Taine (480 ha) in north central Minnesota receives on average 76,000 m3 d-1 of water from Little Sand Creek but has no outlet. Water seeps out of the lake, flows through glacial outwash, and discharges into three nearby lakes with stages 13--14 m lower than Belle Taine. Seepage-meter data indicate water is seeping out of Belle Taine at velocities up to 263 cm d-1. Hydraulic-head measurements made in the lake bed indicate the sediments are unsaturated beneath a portion of the lake edge, and a wedge of unsaturated sediments extends beneath the lake bed as much as 20 m from the shoreline. At the shoreline the water table is as much as 6.7 m below the lake surface. Modeling results of a similar hypothetical setting indicate that the horizontal extent of an unsaturated zone beneath a lake depends on (1) the permeability contrast between the outwash and the lake bed, (2) anisotropy, (3) lake bed slope, and (4) thickness of the lower-permeability lake bed sediments. Although rarely documented, unsaturated sediments beneath a lake may not be extremely uncommon. Similar, much smaller unsaturated-zone areas also have been observed beneath two other lakes in Minnesota. ¿ 2000 American Geophysical Union