Many ground water modeling efforts use a finite-difference method to solve the ground water flow equation, and many of these models require a relatively fine-grid discretization to accurately represent the selected process in limited areas of interest. Use of a fine grid over the entire domain can be computationally prohibitive; using a variably spaced grid can lead to cells with a large aspect ratio and refinement in areas where detail is not needed. One solution is to use local-grid refinement (LGR) whereby the grid is only refined in the area of interest. This work reviews some LGR methods and identifies advantages and drawbacks in test cases using MODFLOW-2000. The first test case is two dimensional and heterogeneous; the second is three dimensional and includes interaction with a meandering river. Results include simulations using a uniform fine grid, a variably spaced grid, a traditional method of LGR without feedback, and a new shared node method with feedback. Discrepancies from the solution obtained with the uniform fine grid are investigated. For the models tested, the traditional one-way coupled approaches produced discrepancies in head up to 6.8% and discrepancies in cell-to-cell fluxes up to 7.1%, while the new method has head and cell-to-cell flux discrepancies of 0.089% and 0.14%, respectively. Additional results highlight the accuracy, flexibility, and CPU time trade-off of these methods and demonstrate how the new method can be successfully implemented to model surface water–ground water interactions.