The goal of this study is to evaluate the geochemical processes and biological changes occurring in coalbed natural gas (CBNG) discharge ponds based on watershed properties. Three basic questions we plan to answer with this research are: what is the quality of CBNG water and does it change over time; what is the fate of iron, barium, arsenic, and selenium in pond water and sediment; and what effects does CBMG water have on aquatic macroinvertebrate communities? One sediment and four water samples (two from pond, two from discharge) were collected from twenty six CBNG discharge ponds located across five Wyoming watersheds. Only two aquatic macroinvertebrate samples were taken from each of the five watersheds. Sample collections occured once a year beginning 24 July, 2003 and terminating on July 25, 2005. Water samples were analyzed for pH, dissolved oxygen, electrical conductivity, major cations and anions, and trace elements. Analytical data from the water samples were modeled with MINTEQA2 to predict chemical changes of trace elements in discharge ponds as a function of time and watershed soils. Discharge pond sediment samples have been separated into different fractions to determine the fate of iron, barium, arsenic, and selenium. Results from water data indicate increased salinity and trace metals in discharge ponds. Aquatic macroinvertebrate communities are most developed in CBNG ponds located in Cheyenne, Belle Fourche, and Little Powder River watersheds. This research will help water users and managers with planning and management of CBNG water.