Open-basin lakes that have outlets, formed where the stored water breached the basin-confining topography (e.g., crater rims), have been recognized on Mars for decades. However, the mechanics involved in formation of these outlets has not been studied in detail. Here, we study this outlet formation process through a series of numerical experiments accomplished by adding erosion and sediment transport routines to an existing hydrodynamic simulation, ANUGA. These experiments are consistent with outlets being carved in single flood events, at least if sediment was available throughout outlet formation as in a transport-limited regime. Peak discharges from these open-basin lakes, including from Jezero crater, were 10(4) to 10(6) m(3)/s, and the outlet-forming floods lasted for days to weeks, depending on lake size. Moreover, we find that sediment transport by suspension was likely important during these floods-outlets could not have reached their observed sizes if flow was limited to bedload transport alone. This in turn may explain why small open-basin lakes are less commonly recognized on Mars, as small lakes had less inherent capacity to transport sediment in suspension and thus incise confining topography catastrophically. Geometry, topographic setting, and earlier fluvial valley development may have played a significant role in influencing the magnitude of outlet-forming floods and resulting outlet canyon incision. Plain Language Summary The landscape of Mars was once very different from today, as its ancient surface hosted hundreds of standing bodies of water. Some of these lakes filled enough to breach their confining topography forming an outlet valley, including Jezero crater where Perseverance is exploring today. Such a geologic interpretation is partially clear-cut, because the outlet valley would not exist if the lake had not filled with water. However, the associated outlet valley-forming events have not been examined in much detail in prior studies (with a few exceptions). These events are similar to floods from dam failures on Earth, as water in the lake perched above surrounding topography has substantial stored energy. Here, we develop routines to couple erosion and sediment transport to an existing hydrodynamic code and study the outlet formation process. We find that the size of lakes and their topographic setting on the Martian landscape were important factors in controlling the erosion of their outlets. At least with our assumptions, we find that suspension of fairly sizable particles, at least the size of fine gravel, is necessary to match the outlet valleys that are observed and that transport of grains along the bed alone was insufficient to match observations.