A field, laboratory, and numerical modelling study was undertaken to determine the impact of groundwater on mining activities and underground space development in the Paleozoic rock units of the Niagara Escarpment near Milton, Ontario. Five holes were drilled at a site next to the Dufferin quarry, penetrating the Amabel dolostone, the Reynales dolostone, the Cabot Head shale, the Manitoulin limestone, the Whirlpool sandstone, and the top part of the Queenston shale. Results of hydrogeological field and laboratory tests indicate the presence of an unconfined aquifer with an average hydraulic conductivity of 2 × 10−5 m/s, and a confined sandstone aquifer with a conductivity of 5 × 10−7 m/s separated by a shale and limestone aquitard having a conductivity of less than 10−9 m/s.Numerical model simulations of the groundwater flow system indicate that, for a 2 km2underground mine located in the dolostone cap rock, the inflow rates range from 8 L/s to over 30 L/s with significant dewatering of the unconfined aquifer occurring within a distance of 1500 m of the mine boundaries. Calculations for a hypothetical mine located in the Whirlpool and Manitoulin Formations gave inflow rates of less than 3 L/s. It is concluded that groundwater conditions will not interfere with mining operations in either the dolostone unit or in the limestone–sandstone unit but could adversely affect subsequent space development in the dolostone unit.Keywords: hydrogeology, groundwater, underground space, aggregate, mining, sedimentary rocks, Niagara Escarpment.