This paper presents a new approach to streamflow forecasting, based on a Markov chain model for estimating the probabilities that the one-step ahead streamflow forecast will be within specified flow ranges. With the new approach, flood forecasting is possible by focusing on a preselected range of streamflows. In addition, the approach introduces a multiobjective (two-criterion) function for the assessment of model performance. The two criteria are (1) the probability of issuing a false alarm and (2) the probability of failing to predict a flood event. The goal is to minimize both criteria simultaneously. Three versions of the model are presented: a first-order Markov chain model, a second-order Markov chain model, and a first-order Markov chain with rainfall as exogenous input model. These models compared favorably to time series models, using data from two watersheds (a semiarid watershed and a temperate watershed), when evaluated in terms of the multiobjective performance criterion. ¿ American Geophysical Union 1993