This dissertation describes the results of archaeological research conducted from 1990 to 1993 in San Martin Jilotepeque, department of Chimaltenango, Guatemala. San Martin Jilotepeque is the location of an important source of obsidian, a volcanic glass that was used by the ancient Maya and their neighbors to make stone tools During Phase I of research, a detailed geological survey of an area of 280 km$\sp2$ was conducted and deposits of obsidian were mapped and sampled. Neutron activation analysis has characterized seven distinct chemical 'fingerprints' for the source area, three of which are associated with prehistoric quarrying activity Phase II consisted of a settlement survey of 138 km$\sp2$ around the obsidian outcrops. The goal of the work was to study changing patterns of settlement, particularly with regard to this natural resource. The project discovered and sampled 147 sites, including residential sites, quarry-workshops, secondary workshops, and workshop disposal areas. Evidence for permanent occupation of the region begins in the late Middle Formative period and continues until the Spanish conquest In Phase III, test pits were placed at selected quarry-workshop, habitation, and secondary workshop sites. Sites with components dating to all periods and representing all levels of the settlement hierarchy were chosen for excavation Analysis reveals that prehistoric production and exchange systems were not static, but changed over time. During the Formative period, production was organized on the household level and distribution was structured as an extended network. During the Classic and Postclassic periods, the economy was a bounded network system and biface production was practiced as a workshop industry