With 4 figures in the text)Relatively few studies have examined the ecology of small mammals of South American tropical forests. The ecology of the neotropical Water rat, Nectomys squamipes, was investigated in gallery forest in central Brazil during a 14-month mark-recapture study. A total of 11 male and 10 female Water rats were captured; minimum number of animals known alive per month varied from one to four per hectare. Home range size for individuals captured eight or more times was 0.3-1.6 ha. Water rats were captured almost exclusively near the stream or in other inundated portions of the forest. Distance to water, soil moisture, number of tree ferns, number of trees, exposed tree-root cover, and litter cover on the ground were among the variables important in defining microhabitat of N. squamipes. At least some males were in breeding condition (testes scrotal) during all months; females were in breeding condition (vagina perforate) most of the year, but pregnancies were noted only in August, October and November. Captive Water rats consumed plant matter, insects (Blattidae, Gyrinidae, Scarabeidae), tadpoles and small fish. Aquatic prey items were located by searching movements of the forepaws. Water rats demonstrated agility in both climbing and swimming. Physiological dependence of N. squamipes on water is suggested by capture sites and observations of drinking in captive animals.