A new approach to the use of tracer test concentration data for inference of the parameters characterizing the hydraulic conductivity heterogeneity is introduced. Rather than using concentration data directly, the concentrations are transformed into indicator variables, whose time-dependent mean and covariance structure in a control plane orthogonal to the mean flow direction are developed in terms of the log conductivity variance, vertical and horizontal correlation lengths, and the mean flow velocity. Parameter values can be inferred by comparison of the theoretical indicator moments with field measurements. The approach is found to have several advantages over the direct use of concentrations. These include (1) insensitivity of the indicator covariance to the log conductivity variance, allowing for independent determination of the integral scale in isotropic media, and (2) less susceptibility to measurement errors or interference from ambient groundwater concentrations. Also, because the indicator records only the first concentration detect, it is more efficient than methods such as travel time moment analysis, which require the entire breakthrough record.