Simulations of future climate using general circulation models (GCMs) suggest that rising concentrations of greenhouse gases may have significant consequences for the global climate. Of less certainty is the extent to which regional scale (i.e., sub-GCM grid) environmental processes will be affected. In this chapter, a range of downscaling techniques are critiqued. Then a relatively simple (yet robust) statistical downscaling technique and its use in the modelling of future runoff scenarios for three river basins in the Sierra Nevada, California, is described. This region was selected because GCM experiments driven by combined greenhouse-gas and sulphate-aerosol forcings consistently show major changes in the hydro-climate of the southwest United States by the end of the 21st century. The regression-based downscaling method was used to simulate daily rainfall and temperature series for streamflow modelling in three Californian river basins under current-and future-climate conditions. The downscaling involved just three predictor variables (specific humidity, zonal velocity component of airflow, and 500 hPa geopotential heights) supplied by the U.K. Meteorological Office couple ocean-atmosphere model (HadCM2) for the grid point nearest the target basins. When evaluated using independent data, the model showed reasonable skill at reproducing observed area-average precipitation, temperature, and concomitant streamflow variations. Overall, the downscaled data resulted in slight underestimates of mean annual streamflow due to underestimates of precipitation in spring and positive temperature biases in winter. Differences in the skill of simulated streamflows amongst the three basins were attributed to the smoothing effects of snowpack on streamflow responses to climate forcing. The Merced and American River basins drain the western, windward slope of the Sierra Nevada and are snowmelt dominated, whereas the Carson River drains the eastern, leeward slope and is a mix of rainfall runoff and snowmelt runoff. Simulated streamflow in the American River responds rapidly and sensitively to daily-scale temperature and precipitation fluctuations and errors; in the Merced and Carson Rivers, the response to the same short-term influences is much less. Consequently, the skill of simulated flows was significantly lower in the American River model than in the Carson and Merced. The physiography of the three basins also accounts for differences in their sensitivities to future climate change. Increases in winter precipitation exceeding +100% coupled with mean temperature rises greater than +2°C result in increased winter streamflows in all three basins. In the Merced and Carson basins, these streamflow increases reflect large changes in winter snowpack, whereas the streamflow changes in the lower elevation American basin are driven primarily by rainfall runoff. Furthermore, reductions in winter snowpack in the American River basin, owing to less precipitation falling as snow and earlier melting of snow at middle elevations, lead to less spring and summer streamflow. Taken collectively, the downscaling results suggest significant changes to both the timing and magnitude of streamflows in the Sierra Nevada by the end of the 21st Century. In the higher elevation basins, the HadCM2 scenario implies more annual streamflow and more streamflow during the spring and summer months that are critical for water-resources management in California. Depending on the relative significance of rainfall runoff and snowmelt, each basin responds in its own way to regional climate forcing. Generally, then, climate scenarios need to be specified — by whatever means — with sufficient temporal and spatial resolution to capture subtle orographic influences if projections of climate-change responses are to be useful and reproducible.