An annual water budget for Florida Bay, the large, seasonally hypersaline estuary in the Everglades National Park, was constructed using physically based models and long‐term (31 years) data on salinity, hydrology, and climate. Effects of seasonal and interannual variations of the net freshwater supply (runoff plus rainfall minus evaporation) on salinity variation within the bay were also examined. Particular attention was paid to the effects of runoff, which are the focus of ambitious plans to restore and conserve the Florida Bay ecosystem. From 1965 to 1995 the annual runoff from the Everglades into the bay was less than one tenth of the annual direct rainfall onto the bay, while estimated annual evaporation slightly exceeded annual rainfall. The average net freshwater supply to the bay over a year was thus approximately zero, and interannual variations in salinity appeared to be affected primarily by interannual fluctuations in rainfall. At the annual scale, runoff apparently had little effect on the bay as a whole during this period. On a seasonal basis, variations in rainfall, evaporation, and runoff were not in phase, and the net freshwater supply to the bay varied between positive and negative values, contributing to a strong seasonal pattern in salinity, especially in regions of the bay relatively isolated from exchanges with the Gulf of Mexico and Atlantic Ocean. Changes in runoff could have a greater effect on salinity in the bay if the seasonal patterns of rainfall and evaporation and the timing of the runoff are considered. One model was also used to simulate spatial and temporal patterns of salinity responses expected to result from changes in net freshwater supply. Simulations in which runoff was increased by a factor of 2 (but with no change in spatial pattern) indicated that increased runoff will lower salinity values in eastern Florida Bay, increase the variability of salinity in the South Region, but have little effect on salinity in the Central and West Regions.