An aquifer storage and recovery scheme is being developed at Clayton township on Lake Alexandrina, South Australia, notably as a solution to provide a town water supply in a location where blue-green algae make River Murray water (extracted via the lake) unfit for domestic use during summer. Algae-free lake water will be injected during winter into a highly saline (35 000 mg/L), unconfined, highly transmissive Tertiary limestone aquifer, and a small component extracted during summer. This investigation is considered to be novel within Australia, and thus the results are likely to be transferable to many other locations. Preliminary injection testing of 50 ML of lake water developed a lens with a thickness at its core of 10 m and an initial salinity of 4500 mg/L. Following 130 days residence, this lens marginally decayed and drifted slightly under the regional gradient. The injection of 300 - 500 ML at a rate of 40 L/s is currently underway (August 1996), which is expected to allow the development of a sacrificial lens within which the potable water supply lens (20 ML during summer) can be injected and maintained. Possible upconing followed by mixing upon withdrawal is not expected to be a problem, due to the small drawdowns experienced during pumping.