In 1971, Colorado State University (CSU) Water Management Field Party and Pakistani investigators discovered that 45% of all the water in Pakistan's man-made irrigation systems was lost before ever reaching arable land. In 1977, A.I.D. funded a water management research program to provide the basis for future development and redesign of Pakistan's national irrigation system. This report outlines the investigation of and reasons for water loss and the ensuing development of an alternative water management program. The primary causes of water loss were identified as high porosity of upper portions of banks due to burrowing animals and insects; thin, fragile banks near watercourse junctions due to soil borrowing for dams; rising levels of water in the watercourse due to vegetative growth and sedimentation; and difficulty in organizing farmers to perform regular maintenance. Experimental masonry and concrete watercourses were built by the Government of Pakistan (GOP) and given to farmers, but the costs were prohibitively high, the quantity of cement needed was too great, and farmers, having no investment in the system, failed to maintain the watercourses. Other lined watercourses constructed by local farm labor using GOP-provided materials were better appreciated and maintained but took too long to build and still required too much cement. Cooperative improvements of earthen channels by farmers using government materials and design, though, had a favorable benefit/cost ratio (3: 1) and were eagerly accepted by farmers. Although subsequent studies showed that regular maintenance of existing canals would have saved almost as much water and at a lower cost, the new system was preferred by farmers and, as a result, both GOP and USAID officials asked the CSU/GOP team to implement the plan nationally. Since full benefits were realized only by those farmers who organized themselves to regularly maintain the system, the report recommends that an education program be established to clearly demonstrate the cause and effect nature between maintenance and reduced losses and that laws be passed to enable local leaders to organize farmers and penalize those not contributing. A 26-item bibliography (1965-80) is appended.