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Cyclic injection, storage, and withdrawal of freshwater in brackish aquifers is a form of aquifer storage and recovery (ASR) that can beneficially supplement water supplies in coastal areas. A 1970s field experiment in Norfolk, Virginia, showed that clay dispersion in the unconsolidated sedimentary aquifer occurred because of cation exchange on clay minerals as freshwater displaced brackish formation water. Migration of interstitial clay particles clogged pores, reduced permeability, and decreased recovery efficiency, but a calcium preflush was found to reduce clay dispersion and lead to a higher recovery efficiency. Column experiments were performed in this study to quantify the relations between permeability changes and clay mineralogy, clay content, and initial water salinity. The results of these experiments indicate that dispersion of montmorillonite clay is a primary contributor to formation damage. The reduction in permeability by clay dispersion may be expressed as a linear function of chloride content. Incorporating these simple functions into a radial, cross-sectional, variable-density, ground-water flow and transport model yielded a satisfactory simulation of the Norfolk field test – and represented an improvement over the model that ignored changes in permeability. This type of model offers a useful planning and design tool for ASR operations in coastal clastic aquifer systems.