Hydroelectric releases on the Deerfield River in northwestern Massachusetts affect surface water-groundwater interactions there by daily reversing the head gradient between river and groundwater. Artificially elevated stage drives river water into the riparian aquifer. Water budget analysis indicates that roughly 10% of this bank-stored water is permanently lost from the river system in a 19.5 km reach, likely as a result of transpiration by bank vegetation. Field observations as well as two-dimensional modeling results show that water losses are not uniform throughout the study reach. Riparian aquifer transmissivity in river sub-reaches largely determines the magnitude of surface water-groundwater exchange as well as net water loss from the river. These newly documented dam-induced losses from river systems inform decisions by river managers and hydroelectric operators of additional tradeoffs of oscillatory dam-release river management.