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Recent studies have shown that groundwater can play an important role in the water balances of alpine lakes. However, a number of uncertainties remain, including (i) whether substantial groundwater exchange is common or rare, (ii) what types of interactions may occur, and (iii) what are the important factors affecting groundwater exchange. This understanding is important for predictions of hydrology, water chemistry and ecology patterns and interactions in the headwaters of mountain watersheds. These questions were addressed for the Lake O'Hara watershed in the Canadian Rockies, using lake water balances applied to two alpine lakes. The results were compared to those of a previously published water balance for the larger Lake O'Hara. Groundwater was a major component of the water balance in both lakes, but the type of groundwater interactions differed despite the lakes being similar in size and located only 500 m apart. The water balance for Opabin Lake was dominated by the groundwater components, with alternating periods of substantial groundwater inflow and outflow. Meanwhile, groundwater inflows were much greater than outflows for Hungabee Lake, with net groundwater fluxes of similar magnitude as the incoming streams. The study results suggest that both groundwater inflow and outflow occurred through a moraine field for Opabin Lake, while groundwater inflow occurred from a talus slope to Hungabee Lake. Thus, the presence of coarse overburden deposits in contact with alpine lakes is a potentially important factor affecting groundwater exchange, which in turn affects the hydrology and ecology of mountain watersheds.