Interaction between surface water and groundwater depends on the position of a lake within the regional flow system. The approach in this paper is to nest a local-scale two-dimensional (2-D) lake aquifer model within a 1-D regional aquifer model to examine the effect of the regional setting on surface water--groundwater interaction. This extends previous steady state flow modeling, which is presented in earlier publications. The results indicate that the type of regional setting and position of the lake within that setting impose constraints on the near field flow geometry. Only nine of 39 previously identified flow regimes are possible in the regional flow system considered. Flow-through lakes are dominant and can occur anywhere within the regional flow. Recharge and discharge lakes are more likely to occur near the groundwater divide where regional hydraulic gradients are flattest and can be counteracted by local forcing in and near the lake.