New analytic solutions for horizontal wells with wellbore storage and skin in layered reservoirs with crossflow are presented. These layered systems can be bounded by two horizontal impermeable boundary planes at the top and the bottom, or either one of the boundary planes can have a constant pressure (the system either has a gas cap or an active aquifer), while the other is maintained as a no-flow boundary. The new solutions are derived by utilizing the reflection and transmission concept of electromagnetics to solve fluid flow problems in three dimensional layered reservoirs, where nonhomogeneity is in only one direction. The solution technique is sufficiently general that it may be applied to a wide variety of fluid flow and well testing problems involving single-phase flow. The solutions are applied to a number of layered-reservoir examples. It is shown that a gas cap or aquifer should automatically not be treated as a constant-pressure boundary. It is also shown that estimation of layer parameters from conventional well tests is difficult. A field example is presented for the use of the new solutions for the interpretation of a buildup test from a horizontal well in a multilayer reservoir, where the layers are separated sporadically by low permeability zones. The Horner method is also used to interpret the field test; however, Horner does not work well for layered systems with horizontal wells.