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The Bureau of Reclamation has nearly completed the $500 million dollar Animas-La Plata water project in southwestern Colorado. The purpose of the project is to settle Native American water rights claims by storing municipal and industrial water in Nighthorse Reservoir for the Ute Mountain Ute and Southern Ute Indian Tribes. In addition to water storage, the Ute Mountain Ute and Southern Ute Tribes have received over $100 million dollars in tribal development funds to purchase land and water rights on and around the reservations. This project was needed, proponents claim, because it would have been more costly to settle the Tribes' claims in court than to construct the project. The purpose of this paper is to assess this argument through an examination of the project's costs and benefits.