The Atascadero Subbasin, located on the central coast of California, is a small, hydraulically separated sub-region of the Paso Robles Groundwater Basin. Three local cities operate approximately 40 wells to pump the Subbasin for their entire water supply needs. Past studies have questioned sustainability of the Subbasin as the combined pumping rate by the three cities is nearing the perennial yield of the Subbasin. The studies have been inconclusive as some areas of the Subbasin have seen increases in water table elevation thus questioning the assessment that consumption is nearing perennial yield. The objective of this research was to perform a water balance study for the aquifer and examine sustainability of the Subbasin. Surface water and groundwater models were developed to investigate the interaction between the Salinas River Alluvium Soils and the deeper Paso Robles Formation based on pumping from different shallow and deep wells. Surface water hydrology of the Subbasin was studied using HEC-HMS, and Visual MODFLOW was used to model the aquifer. Both HEC-HMS and Visual MODFLOW was calibrated to improve simulation accuracy. HEC-HMS was used to quantify natural recharge to the aquifer and to simulate streamflow and water level for the Salinas River. HEC-GeoHMS was used to delineate the watershed, create sub-watersheds and channel networks, and to extract sub-watershed inputs that were used to build HEC-HMS from geospatial data including land use, soil and topography data. Different hydrogeologic layers were defined to represent the alluvium and deeper soils. Results show that currently the Atascadero Subbasin does not appear to be in overdraft as shallow groundwater wells pump Salinas River underflow and the alluvium appears to be providing some recharge to the deeper aquifer. These findings would provide municipal and water managers better understanding of where their water comes from, the effects of their pumping, and could help with developing sustainable management strategies for the Subbasin.