Keywords:Hydropower operation Environmental constraints Re-regulation reservoir Pumped storage Optimization Assessment methodology Environmental constraints imposed on hydropower operation are usually given in the form of minimum environmental flows and maximum and minimum rates of change of flows, or ramp rates. One solution proposed to mitigate the environmental impact caused by the flows discharged by a hydropower plant while reducing the economic impact of the above-mentioned constraints consists in building a reregulation reservoir, or afterbay, downstream of the power plant. Adding pumping capability between the re-regulation reservoir and the main one could contribute both to reducing the size of the reregulation reservoir, with the consequent environmental improvement, and to improving the economic feasibility of the project, always fulfilling the environmental constraints imposed to hydropower operation. The objective of this paper is studying the contribution of a re-regulation reservoir to fulfilling the environmental constraints while reducing the economic impact of said constraints. For that purpose, a revenue-driven optimization model based on mixed integer linear programming is used. Additionally, the advantages of adding pumping capability are analysed. In order to illustrate the applicability of the methodology, a case study based on a real hydropower plant is presented.