This paper presents an iterative scheme for the efficient simulation of groundwater flow in a two-dimensional, heterogeneous aquifer in which the hydraulic conductivity is anisotropic. The scheme is applicable to matrix equations arising from both mixed finite-element and cell-centered finite-difference approximations to the flow equations, and it extends readily to three space dimensions. The scheme, which generalizes an earlier technique for isotropic aquifer, admits a fast multigrid solver for hydraulic heads. Numerical experiments illustrate both the effectiveness of the scheme and the importance of accurately treating anisotropy: Small changes in the off-diagonal terms in the conductivity tensor cause relatively large changes in both the predicted heads and the Darcy velocities.