This is the first study in the U.S. of wastewater disposal costs in mountain areas. The purpose is to improve efficiency in water quality management. Model wastewater disposal systems are analyzed. Engineering-economic cost methods are employed. Investment costs are 30 to 50 percent higher than in other ares. Physical conditions associated with elevation explain most of the difference in costs. Temperatures, soil permeability, topography, water quality and labor productivity are among the important physical conditions related to elevation. Economic conditions include higher land values, interest on investment, peak loads, growth rates and septic tank installation costs. The results contribute to decisions concerning efficient land use. Minimum and maximum levels of land subdivision are shown for typical environmental conditions. Under severe physical restrictions, wastewater transmission costs are prohibitively high. Where septic tanks result in water pollution, development should be disallowed. Under other physical conditions, residential development may be encouraged up to optimum community size of about 12,800 people. Optimum size is much smaller than in other areas of the U.S. because transmission costs rise in narrow mountain valleys. Land subdivision which would increase population beyond the optimum level would increase costs per capita and may result in decisions to limit growth.