Field research of the spring, canal, and fountain system at the ancient Inca site of Machu Picchu defined the site's hydrological and hydraulic characteristics. An analysis of the Machu Picchu water system demonstrated that the Inca builders were skilled in empirical hydraulic engineering methods. A field survey also showed that physical constraints of the gravity-driven water system played an important role in defining the design and layout of this ancient Inca mountain-top community. A hydraulic analysis defined several characteristics of the Machu Picchu spring, canal, and fountain system. The flow of the primary natural spring was measured at 26-125 L/min while the stone-lined domestic canal leading from the spring has an estimated maximum operational capacity of 300 L/min. The 749-m-long canal traverses a steep mountain-side terrain on a stable and well-built terrace and passes through the agricultural sector before entering the urban sector of Machu Picchu. There it supplies 16 fountains that served as the domestic water supply for an estimated permanent population of 300 with a total of 1,000 when the Inca Emperor was in residence. The 1.0-4.8% slope of the small cross-section canal provided adequate cleansing velocities throughout its length. The hydraulic design of the 16 fountains provided adequate water jetting to enable easy filling of the ancient Inca water jug known as the aryballo.