The implementation of immersion lithography requires a sophisticated fluid management system. The design of the fluid management system must simultaneously consider liquid heating, viscous shear, normal forces, air entrainment, and the control of the liquid/air interfaces. In particular, it is becoming clear that the behavior of the receding air/water interface is critical and must be carefully controlled in order to prevent the deposition of residual liquid due to film pulling or the interface instability referred to as meniscus overflow. This paper discusses these failure mechanisms that are associated with the receding meniscus and that have been experimentally observed. In addition, a simple yet physics-based engineering model of the receding meniscus failure is presented and the results of the model are compared to experimental data. (c) 2005 American Vacuum Society.