In 1994, the East Bay Municipal Utility District (EBMUD) commenced a systemwide Seismic Improvement Program to protect their facilities from catastrophic damage. A primary focus of this program has been on retrofitting the 75-year old Claremont Tunnel, which crosses the active Hayward Fault zone. A large earthquake on the Hayward Fault could generate enough right-lateral fault slip to effectively sever this important lifeline. The retrofit project involves construction of a new bypass tunnel through the Hayward Fault zone, together with systematic contact grouting and localized structural repair of the existing concrete liner. Several innovative design measures have been incorporated into the seismic retrofit design, including an oversized tunnel cross section, backfill concrete side drifts, seismic isolation of an internal structural pipe, and shear fuses in the final lining.