Field and petrographic studies allowed us to identify four outcrop-scale hydrogeologic units associated with cemented faults cutting Cenozoic basin-fill deposits in the Albuquerque Basin: high permeability aquifers; low permeability aquitards; coarse grained deformed zones (including cataclasites and zones of mixing); and low permeability fine grained deformed zones. Whereas the coarse grained deformed zones can be up to several meters wide, the fine grained deformed zones reflect highly localized shearing. Even along faults that have undergone hundreds of meters of dip slip, the nature of the deformed zones is almost exclusively a function of the lithology of the adjacent undeformed units. Pre-cementation permeability was estimated using previous air permeameter and grain size studies conducted in the basin, and moderate degrees of permeability anisotropy were inferred from observations of sedimentary and deformational fabrics. Our observations suggest that although the principal directions of permeability anisotropy were changed significantly by faulting, the pre-cementation permeability of deformed sediments is only slightly lower than that of the undeformed sediments. Results of finite difference models of steady-state groundwater flow across idealized faulted aquifer systems suggest that coarse grained deformed zones may serve as conduits for flow between truncated aquifers even if permeability is not increased along the fault zone. In some cases, the geometry of the truncated aquifers gives rise to very steep hydraulic gradients that increase the specific discharge across even moderately permeable fault zones, and the truncation of multi-layered aquifer systems can result in complicated patterns of flow between truncated and juxtaposed aquifers.