In Texas, a computer program has been developed which will estimate flood quantiles for an ungaged site based on data from gaging stations with similar watershed characteristics. The user enters site location and watershed characteristics for an ungaged site and the program selects, from a data base of gaging stations, a subset of stations to be used in the regression analysis. The subset of stations are selected based on the similarity of their basin characteristics to the ungaged site's basin characteristics. This approach offers several advantages over the usual regional regression approach. For example, the estimation data includes only stations whose size, topography, and climate are similar to the ungaged site. Therefore, predictions tend to be made near the center of the space of the explanatory variables, and extrapolation errors are reduced. In addition, any violation of the assumption of linearity for the regression is less likely to cause problems. A new regression equation is developed for each prediction site, thus numerous calculations are necessary. However, today's desktop computers can make the calculations easily. A split sampling study is used to compare this technique with the more conventional regional regression approach.