Timber and water research conducted at the Fernow Experimental Forest provides a 10‐year record of timber growth and streamflow increases. An approach for evaluating streamflow increases in terms of timber growth forgone is modeled. Light cutting (up to one‐fourth of the timber volume) slightly increased the value of timber growth as well as the amount of streamflow. Cutting one‐third to one‐half of the merchantable volume sacrificed timber regrowth for streamflow gain. Cutting one‐half to three‐fourths of the timber volume resulted in small streamflow increases for large sacrifices of timber regrowth. Cutting three‐fourths or more of the forest vegetation provided major increases in streamflow but no return from timber during the 10‐year period of regrowth. Average annual water costs ranged from 0 to $1.30 per thousand gallons. Although these water costs may be invalid outside the Fernow Experimental Forest, they nevertheless suggest a magnitude for water costs under similar forest conditions.