The Monitoring Well Dilution Test determines the horizontal water velocity flowing through specific lithology in a well. The test can be performed in a monitoring well or open borehole. The data from this test is used to determine estimates of hydraulic conductivity and transmissivity in the formational materials surrounding the well, as well as contaminant fate and transport estimates. The Monitoring Well Dilution test is performed by injecting fluorescent dye into an isolated zone within the monitoring well or borehole. The rate of change of the dye concentration is monitored as the dye concentration is diluted by water flow into and out of the isolated zone. The rate of change of dye concentration, along with dimensional parameters within the monitoring well, are used to determine the horizontal flow velocity.