The transient hydraulic behavior of highly compressible aquitards is investigated through numerical analysis and field studies. Variations in the hydraulic parameters of an aquitard during consolidation are accounted for by incorporating empirical relationships derived from standard consolidation tests into the one‐dimensional flow equation. The resulting equation is highly nonlinear. The hydraulic response of an aquitard with physical properties typical of the compressible clays of Mexico City is evaluated with both standard linear analysis and with a nonlinear approach where the hydraulic parameters are stress‐dependent. The results indicate that decreases in the hydraulic diffusivity of the aquitard due to consolidation lead to diminished leakage flux, slower groundwater velocities and solute transport rates, longer transient response periods and less land subsidence than would be predicted by classical linear theory. Evaluation of field data from a site near Mexico City indicates that significant interpretive errors may arise if the stress dependence of the hydraulic parameters is ignored in these types of syst