A new computational procedure based on observations at observation wells is presented to solve the problem of identifying aquifer parameters. This new procedure (quasilinearization), originally developed by Bellman and Kalaba, is an effective way to convert the observations directly to aquifer parameters. The procedure is advantageous because it involves neither curve plotting nor graphical matching. It makes full use of the ability of the modern high speed digital computer to integrate a system of ordinary differential equations with given initial conditions. The parameters to be identified are the storage coefficient and transmissivity in a confined aquifer system.