Environmental problems may develop in groundwater basins when water levels change due to long-term wetter or drier climate or land development. A term related to water-level elevation is flow capacity, which develops in aquifers when the water table is at or very close to land surface. Non-capacity develops in systems where the water table is too deep for capillary water to reach the land surface. Flow capacity is the maximum amount of water that an aquifer can transmit. Sufficient moisture is not available for flow capacity to be established in most aquifers in arid zones and these aquifers are at non-capacity, but many aquifers in today’s deserts were at flow capacity when paleoclimates were cooler and moister during the late Pleistocene. Climate change and anthropogenic activities can cause aquifers to move toward flow capacity but in the last 15,000 years, almost always toward non-capacity. This paper reviews environmental and geotechnical problems associated with the transition of groundwater basins from flow capacity to non-capacity, and vice versa. Five relevant topics are discussed and evaluated: (1) The effects of flow capacity and non-capacity on groundwater basins targeted for waste repositories; (2) The salt contamination of groundwater where flow capacity was present in the Late Pleistocene and is no longer present; (3) Trace element enrichment in salt crusts in playa sediments and environmental risks to groundwater when the flow systems transition from flow capacity to non-capacity; (4) The development and retention of environmental tracers in arid groundwater flow systems at flow capacity that cannot be explained under conditions of non-capacity; and (5) The relationship of flow capacity to fossil hydraulic gradients and non-equilibrium conditions where there is little groundwater extraction. A case example is provided with each of these topics to demonstrate relevance and to provide an understanding of topics as they relate to land management.