The United States Department of Agriculture (USDA) prohibits discrimination in all its programs and activities on the basis of race, color, national origin, gender, religion, age, disability, political beliefs, sexual orientation and marital or family status. (Not all prohibited bases apply to all programs.) Persons with disabilities who require alternative means for communication of program information (Braille, large print, audiotape, etc.) This watershed assessment of the Lake Tahoe basin in northern California and Nevada is the first attempt to collate, synthesize, and interpret available scientific information with a comprehensive view toward management and policy outcomes. The seven-chapter report presents new and existing information in subject areas pertinent to policy development and land and resource management in the basin, including environmental history, air quality, watershed dynamics and water quality, biological integrity, and socioeconomic conditions. Key findings report the extent of recent climatic changes, historic accounts of past environmental disturbances, state of our understanding of why the Lake's clarity is declining, significant role that air quality plays in the decline, and an initial nutrient budget for nitrogen and phosphorous that are believed to fuel algae growth. In addition, important new work related to old-growth forests, the risk of wildfire and the conservation of biological diversity in the basin have helped to broaden our perspective of the interrelated nature of the environmental challenge facing the basin. A detailed analysis of institutional arrangements and capacities in the Lake Tahoe basin is presented in the context of environmental decision-making.