A nonstationary wave transformation model is developed, based upon a finite difference scheme. This model computes spatial and temporal distributions of wave spectral density in shallow water areas with irregular bottom topography. Current knowledge of the dynamic and kinematic processes is incorporated into the model, which include the usual wave refraction and shoaling effects as well as nonlinear dissipative processes (breaking, bottom friction, and a constraint on total energy growth in a depth-limited situation), and local wind wave generation processes (a combined Phillips-Miles model). Another important feature of the model is the inclusion of current effects: spatial and temporal current distributions can be introduced as input conditions. Based upon this model, a number of sample computations are given to examine the characteristics of nonstationary wave transformations processes. Finally, one set of wave data collected in the North Sea during the MARSEN Project is used to compare with numerical model computations.