Outflow channels provide strong evidence for abundant water near the Martian surface and an extensive groundwater system. Collapse of the surface into some channels suggests massive subsurface erosion and/or solution in addition to erosion by flow across the surface. Flat floors, steep walls, longitudinal striae and ridges, downstream deflection of striae from channel walls, and lack of river channels suggest that fretted channels form dominantly by mass wasting. A two‐stage process is proposed. In the first stage, extension of valleys at valley heads is favored by seepage of groundwater into debris shed from slopes. The debris moves downstream, aided by interstitial groundwater at the base of the debris, possibly with high pore pressures. In the second stage, because of climate change or a lower heat flow, groundwater can no longer seep into the debris flows in the valleys, their movement almost stops, and more viscous ice‐lubricated debris aprons form. Almost all uplands at elevations greater than +1 km are dissected by valley networks, although the drainage densities are orders of magnitude less than is typical for the Earth. The valley networks resemble terrestrial river systems in planimetric shape, but U‐shaped and rectangular‐shaped cross sections, levéelike peripheral ridges, median ridges, patterns of branching and rejoining, and flat floors without river channels suggest that the networks may not be true analogs to terrestrial river valleys. It is proposed that they, like the fretted channels, formed mainly by mass wasting, aided by groundwater seepage into the mass‐wasted debris. Movements of only millimeters to centimeters per year are needed to explain the channel lengths. Most valley formation ceased early at low latitudes because of progressive dehydration of the near surface, the result of sublimation of water and/or drainage of groundwater to regions of lower elevations. Valley formation persisted to later dates where aided by steep slopes, as on crater and canyon walls, and/or by high heat flows and the presence of water, as on some volcanoes.