A four-variable land-atmosphere model is developed to investigate the coupled exchanges of water and energy between the land surface and atmosphere and the role of these exchanges in the statistical behavior of continental climates. The land-atmosphere system is substantially simplified and formulated as a set of ordinary differential equations that, with the addition of random noise, are suitable for analysis in the form of the multivariate Iˆto equation. The model treats the soil layer and the near-surface atmosphere as reservoirs with storage capacities for heat and water. The transfers between these reservoirs are regulated by four states: soil saturation, soil temperature, air specific humidity, and air potential temperature. The atmospheric reservoir is treated as a turbulently mixed boundary layer of fixed depth. Heat and moisture advection, precipitation, and layer-top air entrainment are parameterized. The system is forced externally by solar radiation and the lateral advection of air and water mass. The remaining energy and water mass exchanges are expressed in terms of the state variables. The model development and equilibrium solutions are presented. Although comparisons between observed data and steady state model results are inexact, the model appears to do a reasonable job of partitioning net radiation into sensible and latent heat flux in appropriate proportions for bare-soil midlatitude summer conditions. Subsequent work will introduce randomness into the forcing terms to investigate the effect of water-energy coupling and land-atmosphere interaction on variability and persistence in the climatic system. ¿ American Geophysical Union 1995