This paper describes an intelligent system used to monitor and control the separation of oil from water downhole with simultaneous re-injection of the water into a zone accessible from the same wellbore. The paper outlines the individual technologies that make up the system, describes how the technologies are assembled in the wellbore, and indicates what requirements the system has of the wellbore. The paper provides a description of an intelligent system that significantly reduces water produced from a borehole while potentially increasing oil production. The paper describes the control of water flow into an injection zone and the increase in efficiency of a pump system by utilizing downhole instrumentation and intelligent systems for monitoring and control of the oil/water separation process. The intelligent system is composed of an artificial lift system, permanently deployed instrumentation for fluid and equipment monitoring, completion hardware based on an electric tubing-to-tubing choke valve, and a hydrocyclone-based oil/water separator.