An environmental isotope and hydrochemical study was carried out to conceptualize the surface water and groundwater interaction and to explore the groundwater flow pattern in relation to the geological setting. More emphasis is given to the Afar Depression where groundwater is a vital source of water supply. Conventional field hydrogeological study and river discharge records support the isotope and hydrochemical analysis. The region is tectonically active, comprising rift volcanic terrain bordered by highlands. The result revealed that recent meteoric water is the major source of recharge. Three distinct groundwater zones were identified associated with the highlands, transitional escarpment and the rift. Towards the rift, the ionic concentration and isotopic enrichment (δ2H and δ18degO) increases following the groundwater flow paths, which is strongly controlled by axial rift faults. The groundwater flow converges to the seismically active volcano–tectonic depressions with internal drainage and to the Awash River. Within the Afar Depression, at least four groundwater regimen are identified: (1) fresh and shallow groundwater associated with alluvial deposits ultimately recharged by isotopically depleted recent highland rainfall and the evaporated Awash River; (2) cold and relatively younger groundwater within localized fractured volcanics showing mixed origin in axial fault zones; (3) old groundwater with very high ionic concentration and low isotopic signature localized in deep volcanic aquifers; and (4) old and hot saline groundwaters connected to geothermal systems. The study demonstrated that dependable groundwater can only be obtained from the first two aquifer types in aerially restricted zones in flat plains following river courses, local wadis and volcano–tectonic depressions. The conventional hydrogeological survey and discharge records indicate substantial channel losses from the Awash River, which becomes a more dominant source of recharge in central and lower Awash valleys. Copyright © 2007 John Wiley & Sons, Ltd.