In recent years, the aquifer simulation model has been combined with techniques of optimization to address important groundwater management problems. The combined simulation and optimization model accounts for the complex behavior of the groundwater system and identifies the best management strategy under consideration of the management objectives and constraints. Simulation‐optimization groundwater management models have been developed for a variety of applications, such as restoration of contaminated groundwater, control of aquifer hydraulics, allocation of ground and surface water resources, and evaluation of groundwater policies [see reviews by Gorelick, 1983, 1990; Yeh, 1992; Ahlfeld and Heidari, 1994; Bredehoeft et al, 1994]. Gorelick [1983] divides groundwater management models into three categories: groundwater hydraulic management, groundwater quality management, and groundwater policy evaluation and allocation. This review focuses in detail on the recent advances made in groundwater hydraulic and groundwater quality management modeling, which encompasses most of the aquifer management work done in the past four years. For a review of recent research in groundwater policy evaluation and allocation, see Bredehoeft et al. [1994]. Copyright 1995 by the American Geophysical Union.