In a near-natural state the aptly named 1520 km2 Muskeg River basin in northeastern Alberta has an average annual water yield of 94 mm, (20 percent of the precipitation), and an average annual sediment yield of 3210 tonnes (2.20 t/km2) which is derived almost exclusively from channel and riparian sources. The goals of this investigation were to describe the present hydrologic and sediment regimes and to predict the consequences of surface disturbances which precede oil sands mining. Runoff plots were established in three representative surficial material areas to measure runoff and sediment yields from small denuded sites so as to develop runoff and sediment yield models. Runoff lot responses to summer convectional showers stripping of the muskeg cover will result in response to rainstorms and a major increase in upland erosion. However, because of the limited number of rainfall events during the study period, the rainfall-runoff relationships are not statistically significant. Sediment yield is reasonably well predicted by the Universal Soil Loss Equation (USLE), using a single storm approach. On fine-textured ground moraine deposits, which cover the southeastern half of the basin, over half the incident precipitation from the largest rainfall event was routed as surface runoff. Average annual sediment yields were predicted to be in the order of thousands of tonnes per km2, depending on actual site conditions. In the sandy outwash areas about 98 percent of the incident precipitation is infiltrated, and average annual sediment yields are predicted to be in the order of tens to hundreds of tonnes per km2, depending on actual site conditions.