A regional climate model including a physically based parameterization of the subgrid effects of topography on clouds and precipitation is driven by observed meteorology on its lateral boundaries for a period of 12 months. The meteorology simulated by the model for each subgrid elevation class is distributed across a mountain watershed according to the surface elevation within the watershed. The simulated meteorology is used to drive a detailed model of hydrology-vegetation dynamics at the topographic scale described by digital elevation data, 180 m. The watershed model, which includes a two-layer canopy model for evapotranspiration, an energy-balance model for snow accumulation and melt, a two-layer rooting zone model, and a quasi-three-dimensional saturated subsurface flow model, is used to simulate the seasonal cycle of the accumulation and melt of snow and the accumulation and discharge of surface water within a mountain watershed in northwestern Montana. Comparisons between the simulated and the recorded snow cover and river discharge at the base of the watershed indicate comparable if not better agreement than between the recorded fields and those simulated by the watershed model driven by meteorolgy observed at two stations within the watershed. The agreement with the recorded discharge, precipitation, and snow water equivalent is also clearly superior to simulations driven by the regional climate model run without the subgrid parameterization but with one-third the grid size of the simulation with the subgrid parameterization. ¿ American Geophysical Union 1996