In surface-water-irrigated western valleys, groundwater discharge from excess irrigation sustains winter streamflow at levels that exceed natural flows. This unnatural condition has persisted for so long that hydrologists, water managers, and water users consider it to be normal. Changing land uses and irrigation practices complicate efforts to manage groundwater discharge and, in turn, to protect instream flows. We examined the impacts on streamflow of (1) seasonal groundwater pumping at various distances from the Gallatin River and (2) improving irrigation efficiency in the Gallatin Valley, Montana. We show that the greater the distance from a seasonally pumping well to a stream, the less the stream depletion fluctuates seasonally and the greater the proportion of annual depletion occurs during the nonirrigation season. Furthermore, we show that increasing irrigation efficiency has implications beyond simply reducing diversions. Improving irrigation efficiency reduces fall and winter flows to a lower, but more natural condition than the artificially high conditions to which we have become accustomed. However, existing water users and aquatic ecosystems may rely upon return flows from inefficient irrigation systems. By strategically timing and locating artificial recharge within a basin, groundwater and surface water may be managed conjunctively to help maintain desirable streamflow conditions as land uses and irrigation practices change.