The effect of surface conductivity on the peak magnetic field radiated by the first return stroke in cloud‐to‐ground lightning was investigated by comparing the peak magnetic fields from return strokes that struck water with those that struck land. The data were obtained from a network of three gated, wideband magnetic direction finders (DFs) at the NASA Kennedy Space Center during the summer of 1985. Two geographical areas that were equidistant from two of the direction finders were compared where the flash distances ranged from approximately 40 to 60 km. An unbiased data set was obtained by correcting site errors, equalizing differences in sensor gain, eliminating directional biases in DF triggering, and keeping differences in signal attenuation over the two surfaces to a minimum. When a statistical analysis was performed on the frequency distributions of the signal amplitudes, there was no statistically significant difference in the peak amplitudes of first return strokes over land (λ = 8.2 × 10−3 mho m−1) and over water (λ = 4 mho m−1). Therefore we infer that the conductivity of the underlying surface does not significantly affect the magnitude of the peak magnetic field, and hence the peak current, in the first return stroke of a cloud‐to‐ground lightning flash.