In the Antarctic Dry Valleys gullies and streams form primarily from top-down melting of cold-based glacial ice and/or annual/perennial surface snow and ice accumulations. Significant water transport and storage occurs in the hyporheic zone. Surface water flow in Dry Valley gullies and streams varies widely in occurrence and flux, based on local microenvironments and daily, intra-seasonal and inter-annual variations in insolation. Between periods of melting and flow, channel water commonly freezes to produce a veneer of surface ice; salts are also deposited. Flow in channels can be maintained beyond the period of active channel carving by topographic trapping of windblown snow and its subsequent melting, producing local ice and sediment deposits in the gully system. These characteristics provide important insight into the formation of geologically recent and perhaps currently active gullies on Mars, and candidate microbiological habitats.