High-resolution altimetry from the Mars Orbiter Laser Altimeter (MOLA) provides new data to test the interpretation that unusual flow-like deposits in Elysium-Utopia were emplaced as lahars (mass flows fluidized by water that are induced by volcanism). Using several data products derived from MOLA altimetry, we confirm that two major types of terrain dominate the region: (1) lava flows and (2) deposits consistent with emplacement by debris flows along medial channels, supporting the lahar hypothesis of previous workers. Associated terrain types are interpreted to be the result of modification of lavas by water and/or ice associated with the debris outflows and by later climatically controlled deposition and removal of a volatile-rich dust layer at high latitudes. Both lava flows and debris flows originate from northwest-trending, radial fossae on the flanks of the Elysium rise. The fossae are interpreted here to have been formed by laterally propagating dikes from Elysium Mons that have intersected or approached the surface. Fossae that are sources for only lava flows lie at higher elevations (-3400 m and above) than those that are the sources of lahars and channels (-3100 m to -4300 m). This discrepancy in source location suggests that the availability of groundwater responsible for lahar formation is elevation-dependent and reflects a hydrostatic-equilibrium distribution of water in the subsurface. These observations at Elysium allow a geologic test of the prevailing hypothesis on the configuration of the subsurface Martian hydrosphere: that an interconnected groundwater system at hydrostatic equilibrium may exist below a confining cryosphere. If water at a certain elevation is under hydrostatic pressure and this cryosphere is disrupted, the potential arises for groundwater to flow to the surface. We propose the following flow-emplacement model in which geologic activity in northwest Elysium is consistent with the preceding hydrological model. Laterally propagating dikes from Elysium approached or intersected the surface on the flanks of the rise, resulting in effusion of lava flows and possibly pyroclastics. Disruption of the cryosphere by the dikes allowed groundwater to escape to the surface and form lahars by interaction with erupted and existing material at elevations at and below the maximum level of subsurface saturated ground. This model provides a consistent explanation for the major structures and units (both lava flows and lahars) and their elevation and spatial relationships in the Elysium-Utopia region. This type of mega-lahar, with groundwater as its primary water source, is rare on Earth and occurs on Mars due to Martian climatic and hydrologic conditions and the presence of a global confining cryosphere. This study supports the idea that groundwater outflow resulting from disruption of a confining cryosphere may bean important phenomenon in Martian geology. In particular, general association of major outflow with major volcanic areas on Mars is highly consistent with a model of disruption of a groundwater-confining cryosphere by dikes expected to be intruded in these areas. Further geologic analyses of features and processes related to groundwater outflow will help constrain the degree and causes of variability within the Martian hydrologic system.