A reservoir system with two neighboring layers, the tested and the adjacent layers being separated by impermeable strata, is considered. Fluid may still migrate from the adjacent layer to the tested layer if the zonal isolation behind casing is compromised or flow channels exist in the vicinity. A method is presented to diagnose the fluid contribution to the tested layer from the adjacent layer, and to quantify the transient rate of cross flow by utilizing the transient-pressure data.During transient tests on the tested layer, the cross flow from the adjacent layer has to be accounted for to ascertain reasonable characterization of the tested layer. A new analytical solution for a two-layer system with cross flow behind casing has been employed to understand the effects of cross flow on the transient behavior in the tested layer. Matching of type curves with measured pressures helps diagnose the presence of cross flow behind casing and estimate parameters. The cross-flow rate as a function of time is also estimated by quantifying the hydraulic conductivity of the compromised zonal isolation.This study shows that the magnitude of the hydraulic conductivity of the compromised zonal isolation or flow channels has a strong effect on the rate of cross flow with the flow capacities of individual layers. There is an upper limit of the conductivity of the zonal isolation beyond which the cross-flow rate is limited by the layer flow capacities. For a given two-layer system, the cross-flow rate increases with time for a constant rate drawdown in the tested layer due to the increasing pressure differential across the compromised zonal isolation. The test duration is another important aspect which lets the cross-flow rate reach a critical value to be detected in the log-log plot of the pressure derivative. This means that a long transient test is likely to be affected substantially by the cross flow behind casing.Field examples with build-up test data are presented to illustrate the methodology. These show that ignoring the flow behind casing may lead to an over-estimated flow capacity of the tested reservoir layer. Matching of the transient-test data also provides estimates of the conductivity of the zonal isolation, which leads to computing the transient cross-flow rates.