In the Murray Basin of southeastern Australia, the accelerated emergence of groundwater-related salinity problems in recent decades has led to the realisation that future viability of many of its agricultural communities depends on management of its water resources. Part of the management strategy involves improving our understanding of the relationships between aquifer geometry, permeability barriers, groundwater flow and surface discharge of saline groundwater. This paper summarises the stratigraphy, distribution and geometry of units deposited in the mid-Tertiary which now form major subsurface permeability barriers. Subsurface facies analysis of borelogs and palaeogeographic reconstructions indicate that the Murray Basin has been invaded by the sea on at least three separate occasions during the Cainozoic. The most prolonged of these marine incursions commenced about 32 Ma ago, when the western Murray Basin was invaded by a shallow epicontinental sea, which remained within the basin for at least 20 Ma. In the mid-Oligocene, thin (10- 30 m) calcareous clay (Ettrick Formation) of the lower confining layer was deposited over much of the southwest of the basin . This clay now separates the underlying Renmark Group aquifer system from the overlying Murray Group aquifer system, but does not impede the flow of groundwater from the margins of the basin towards its main depocentre in the central west of the basin. As relative sea level continued to rise in the Late Oligocene, the thin sediments of the lower confining layer were overlain by thicker (generally > 100 m) Upper Oligocene-Middle Miocene limestone of the Murray Group aquifer system. To the north and east, the limestone grades laterally into thick (locally > 100 m) shallow-marine to lagoonal calcareous clay (Winnambool Formation) and shallow to marginal-marine fine terrigenous clastics (Geera Clay). The Winnambool Formation and Geera Clay combine to form the mid- Tertiary low-permeability barrie, in an arcuate zone in west central areas of the basin, which causes major disruption to the flow of groundwater towards the main depocentre in the central west. The Geera Clay forms an important subsurface barrier, resulting in the partial diversion of flow into the overlying Pliocene Sands aquifer system, and locally to surface groundwater discharge complexes. The porosity and permeability of the Geera Clay were examined in a fully cored section in Piangil West-2 borehole. It has previously been assumed that the Geera Clay consisted predominantly of clay minerals, but the section in Piangil West-2 contained only 6% of black plastic clay, and was characterised by dark and carbonaceous semi-consolidated silt and muddy silt (65%), unconsolidated and partly indurated sand (15%), and mud (14%). Visual estimations of mesoscopic and macroscopic interparticle porosity suggest effective porosity is now 0- 7%, whereas the original mesoscopic porosity is thought to have ranged from about 5- 10% in the silt to 30% in the sand. Burrow interparticle porosity predominated. The occlusion of effective interparticle porosity was caused by precipitation of clay, glauconite, pyrite, calcite and dolomite at an early stage. Carbonate and minor pyrite precipitation continued as both replacement and porefill for the duration of shallow compaction through to late diagenesis, when pyrite, resinous organic matter, and traces of arsenopyrite occluded most of the remaining effective porosity.