A flexible, robust method for linking parent (regional-scale) and child (local-scale) grids of locally refined models that use different numerical methods is developed based on a new, iterative ghost-node method. Tests are presented for two-dimensional and three-dimensional pumped systems that are homogeneous or that have simple heterogeneity. The parent and child grids are simulated using the block-centered finite-difference MODFLOW and control-volume finite-element FEHM models, respectively. The models are solved iteratively through head-dependent (child model) and specified-flow (parent model) boundary conditions. Boundary conditions for models with nonmatching grids or zones of different hydraulic conductivity are derived and tested against heads and flows from analytical or globally-refined models. Results indicate that for homogeneous two- and three-dimensional models with matched grids (integer number of child cells per parent cell), the new method is nearly as accurate as the coupling of two MODFLOW models using the shared-node method and, surprisingly, errors are slightly lower for nonmatching grids (noninteger number of child cells per parent cell). For heterogeneous three-dimensional systems, this paper compares two methods for each of the two sets of boundary conditions: external heads at head-dependent boundary conditions for the child model are calculated using bilinear interpolation or a Darcy-weighted interpolation; specified-flow boundary conditions for the parent model are calculated using model-grid or hydrogeologic-unit hydraulic conductivities. Results suggest that significantly more accurate heads and flows are produced when both Darcy-weighted interpolation and hydrogeologic-unit hydraulic conductivities are used, while the other methods produce larger errors at the boundary between the regional and local models. The tests suggest that, if posed correctly, the ghost-node method performs well. Additional testing is needed for highly heterogeneous systems. ?? 2007 Elsevier Ltd. All rights reserved.