Abstract: The infusion of fluid from the formation being drilled into a borehole is detected in an MWD system by modulating the drilling fluid stream in the drill pipe and detecting pressure variations commensurate with the modulation at the surface in the annulus between the drill pipe and wall of the well. Modulation to generate the pressure variations in the annulus is accomplished by the same pressure generating element used to generate pressure signals in the mud column for MWD measurements. The detected pressure variations are compared in phase and/or amplitude with their own near term past history or with the drilling fluid pressure variations in the drill pipe resulting from the modulation. Variations in phase or amplitude which can not be attributed to changes in the drilling operation will be indicative of fluid infusion.