Tens of millions of dollars have been spent to control Tamarix (saltcedar) trees along waterways in the Southwestern United States for the purpose of increasing streamflow yet no increase in streamflow has been demonstrated. The Pecos River Ecosystem Project (PREP) served as a case study to characterize surface and groundwater interaction along the Pecos River in Texas, assess the influence of saltcedar transpiration on stream stage and water table fluctuations, and evaluate the impacts of large-scale saltcedar control on baseflows. This is the first study that has investigated the influence of saltcedar transpiration on surface and groundwater interaction and the first to provide a mechanistic explanation for the lack of measurable increase in streamflow. Neither saltcedar transpiration nor saltcedar removal influenced hydraulic gradients, streambank seepage, or stream elevations. The results of the plot scale studies indicate saltcedar transpiration along the Pecos River is lower than reported elsewhere and therefore may not yield detectable increases in baseflow. To extend the study to a much larger scale, we analyzed annual baseflows at the downstream end of 340 km river reach from 1999 (pretreatment) through 2009. Surprisingly, baseflows declined for four years after the project began despite additional acreages of saltcedar treatment each year. However, baseflow surged in 2005 and remained higher than the pretreatment year (1999) through 2009. Additional detailed analyses of reservoir release and delivery records and rainfall are needed to better understand contributions of rainfall and flow regulation to this increase. Tracer based studies to determine the relative contributions of releases and groundwater would also enable a better interpretation of the change in baseflows. We did not investigate any other reported benefits, such as restoration of native plant species, or reduced soil salinity, of saltcedar control.