Understanding the temporal and spatial dynamics of key water balance components of the Nile River will provide important information for the management of its water resources. This study used satellite-derived rainfall and other key weather variables derived from the Global Data Assimilation System to estimate and map the distribution of rainfall, actual evapotranspiration (ETa), and runoff. Daily water balance components were modelled in a grid-cell environment at 0.1 degree (~10 km) spatial resolution for 7 years from 2001 through 2007. Annual maps of the key water balance components and derived variables such as runoff and ETa as a percent of rainfall were produced. Generally, the spatial patterns of rainfall and ETa indicate high values in the upstream watersheds (Uganda, southern Sudan, and southwestern Ethiopia) and low values in the downstream watersheds. However, runoff as a percent of rainfall is much higher in the Ethiopian highlands around the Blue Nile subwatershed. The analysis also showed the possible impact of land degradation in the Ethiopian highlands in reducing ETa magnitudes despite the availability of sufficient rainfall. Although the model estimates require field validation for the different subwatersheds, the runoff volume estimate for the Blue Nile subwatershed is within 7.0% of a figure reported from an earlier study. Further research is required for a thorough validation of the results and their integration with ecohydrologic models for better management of water and land resources in the various Nile Basin ecosystems. Published in 2009 by John Wiley & Sons, Ltd.