Abstract. A distributed daily rainfall–runoff model is applied to the Tejo and Guadiana river basins in Spain and Portugal to simulate the effects of climate change on runoff production, river flows and water resource availability with results aggregated to the monthly level. The model is calibrated, validated and then used for a series of climate change impact assessments for the period 2070–2100. Future scenarios are derived from the HadRM3H regional climate model (RCM) using two techniques: firstly a bias-corrected RCM output, with monthly mean correction factors calculated from observed rainfall records; and, secondly, a circulation-pattern-based stochastic rainfall model. Major reductions in rainfall and streamflow are projected throughout the year; these results differ from those for previous studies where winter increases are projected. Despite uncertainties in the representation of heavily managed river systems, the projected impacts are serious and pose major threats to the maintenance of bipartite water treaties between Spain and Portugal and the supply of water to urban and rural regions of Portugal.