A three-dimensional, finite difference model was developed for simulating steady and unsteady, saturated and unsaturated flow in a stream-aquifer system. The basis of the model is the finite difference form of Richard's equation for unsaturated and saturated subsurface flow. Effects of stream flow on groundwater movement are treated by applying the appropriate boundary conditions to Richard's equation. Contributions of groundwater to river flow are quantified by including seepage rates in the computation of river discharge. The three-dimensional model was developed for use in this study to interact with two-dimensional model segments, which were interfaced with the three-dimensional model on its upstream and downstream ends. The model produced results which match observed data for the study area, which consisted of a 40-mile reach of the Arkansas Valley of Southeastern Colorado. Computed estimates of river discharge at each end of the study area and water table elevations throughout the region agreed reasonably well with observed data. An analysis of the sensitivity of results produced by the model to variation in the values of several input parameters was included as part of the study.