(Possible changes in glacier mass balance are among the most important consequences of future climate change with both local and global implications, such as changes in the discharge of glacial rivers, changes in the vertical stratification in the upper layers of the Arctic Ocean, and a rise in global sea level. The response of the Hofsj¿kull and southern Vatnaj¿kull ice caps in Iceland to climate change is analyzed with a vertically integrated, finite difference ice flow model coupled with a degree day mass balance model. Transient climate change simulations are forced with a climate change scenario for the Nordic countries, which for Iceland, specifies a warming rate of 0.15¿C per decade in midsummer and 0.3¿C per decade in midwinter, with a sinusoidal variation through the year starting from the baseline period 1981--2000. Precipitation is either held steady or is increased at 5% per ¿C of warming. Modeled ice volume is reduced by half within 100--150 years. About 2030, annual average runoff from the area that is presently covered by ice is projected to have increased by approximately 0.7 m yr-1 for Hofsj¿kull and by 1.4 m yr-1 for southern Vatnaj¿kull. The sensitivity of the mass balance of the ice caps to climate change was found to be in the range 0.4--0.8 mw.e. yr-1 ¿C-1 for Hofsj¿kull and 0.8--1.3 mw.e. yr-1 ¿C-1 for southern Vatnaj¿kull. The sensitivity remained within these ranges more than 150 years into the future.)