The Zhanghe Irrigation System (ZIS), in Central China, has drawn attention internationally because it managed to sustain its rice production in the face of a dramatic reallocation of water to cities, industries and hydropower uses. Ponds, the small reservoirs ubiquitous in the area, are hypothesized to have been instrumental in this. Ponds are recharged by a combination of return flows from irrigation and runoff from catchment areas within the irrigated perimeter. They provide a flexible, local source of irrigation water to farmers. This paper assesses the storage capacity and some key hydrological properties of ponds in a major canal command within ZIS. Using remote sensing data (Landsat and IKONOS) and an area�volume relationship based on a field survey, we obtained an overall pond storage capacity of 96 mm (per unit irrigated area). A comparative analysis between 1978 and 2001 reveals that part of this capacity results from a very significant development of ponds (particularly in the smaller range of sizes) in the time interval, probably as a response to rapidly declining canal supplies. We developed a high-resolution digital elevation model from 1:10,000 topographic maps to support a GIS-based hydrological analysis. Pond catchments were delineated and found to extensively overlap, forming hydrological cascades of up to 15 units. In a 76-km2 area within the irrigation system, we found an average of close to five �connected� ponds downstream of each irrigated pixel. This high level of connectivity provides opportunities for multiple reuses of water as it flows along toposequences. A fundamental implication is that field �losses� such as seepage and percolation do not necessarily represent losses at a larger scale. Such scale effects need to be adequately taken into account to avoid making wrong assumptions about water-saving interventions in irrigation.