This pilot study, done by the U.S. Geological Survey in cooperation with the Delaware River Basin Commission, developed annual water budgets using available data for five watersheds in the Delaware River Basin with different degrees of urbanization and different geological settings. A basin water budget and a water-use budget were developed for each watershed. The basin water budget describes inputs to the watershed (precipitation and imported water), outputs of water from the watershed (streamflow, exported water, leakage, consumed water, and evapotranspiration), and changes in groundwater and surface-water storage. The water-use budget describes water withdrawals in the watershed (ground-water and surfacewater withdrawals), discharges of water in the watershed (discharge to surface water and ground water), and movement of water of water into and out of the watershed (imports, exports, and consumed water). The water-budget equations developed for this study can be applied to any watershed in the Delaware River Basin. Data used to develop the water budgets were were developed for 1988-2002. Average annual precipitation, streamflow, and evapotranspiration were 44.11, 22.13, and 24.13 inches, respectively. Most of the water that was withdrawn and exported from the basin came from confined aquifers. The small amount of water withdrawn from unconfined aquifers (average of less than 0.01 inches) and surface-water sources (average 0.77 inches) was used for golf-course, agricultural, and nonagricultural irrigation and some industrial purposes. A regional sewer system completed in 1991 dramatically reduced discharge to surface water in the watershed from 2.95 inches in 1988 to 0.01 inches in 1994.