Production of methane from thick, extensive coal beds in the Powder River Basin of Wyoming has created water management issues. Since development began in 1997, more than 650 billion liters of water have been produced from approximately 22,000 wells. Infiltration impoundments are used widely to dispose of by-product water from coal bed natural gas (CBNG) production, but their hydrogeologic effects are poorly understood. Helicopter electromagnetic surveys (HEM) were completed in July 2003 and July 2004 to characterize the hydrogeology of an alluvial aquifer along the Powder River. The aquifer is receiving CBNG produced water discharge from infiltration impoundments. HEM data were subjected to Occam's inversion algorithms to determine the aquifer bulk conductivity, which was then correlated towater salinity using site-specific sampling results. The HEM data provided high-resolution images of salinity levels in the aquifer, a result not attainable using traditional sampling methods. Interpretation of these images reveals clearly the produced water influence on aquifer water quality. Potential shortfalls to this method occur where there is no significant contrast in aquifer salinity and infiltrating produced water salinity and where there might be significant changes in aquifer lithology. Despite these limitations, airborne geophysical methods can provide a broadscale (watershed-scale) tool to evaluate CBNG water disposal, especially in areas where field-based investigations are logistically prohibitive. This research has implications for design and location strategies of future CBNG water surface disposal facilities within the Powder River Basin.