Water-budget components and the average vertical conductance were determined for Magnolia Lake in north-central Florida. At Magnolia Lake, a large part of the ground-water outflow occurs by means of vertical leakage through an underlying semipermeable confining unit to a deeper, highly transmissive aquifer called the upper Floridan aquifer, which is typical of many karst lakes in Florida. Monthly water-budget components were calculated for a two-year period from October 1995 through September 1997, and the water-budget component that represents vertical leakage to the upper Floridan aquifer was calculated as a residual in die water-budget equation. Relative to the 83.4 ha surface area of the lake, rainfall at Magnolia Lake was 1.31 m/year, surface-water inflow was 9.57 m/year, direct runoff was 0.19 m/year, and surficial-aquifer inflow was 0.69 m/year. Lake evaporation was 1.08 m/year, surface-water outflow was 7.79 m/year, and surficial-aquifer outflow was 0.14 m/year. The lake stage decreased by 0.13 m/year, and vertical leakage to the upper Floridan aquifer was 2.88 m/year. Values for the average vertical conductance (K-V/b), a coefficient that represents the average of the vertical conductances of the hydrogeologic units between the bottom of a lake and the top of the upper Floridan aquifer, also were calculated for Magnolia Lake. The mean value for K-V/b is 5.91 X 10(-4) day(-1), with a standard deviation of 2.91 X 10(-4) day(-1). The values for vertical leakage and K-V/b at Magnolia Lake are greater than values that occur in the surrounding basin away from the lake, and indicate that the confining unit beneath Magnolia Lake is breached to some extent.