Model‐estimated monthly water balance components (i.e., potential evapotranspiration, actual evapotranspiration, and runoff (R)) for 146 United States (U.S.) Geological Survey 8‐digit hydrologic units located in the Colorado River Basin (CRB) are used to examine the temporal and spatial variability of the CRB water balance for water years 1901 through 2014 (a water year is the period from October 1 of one year through September 30 of the following year). Results indicate that the CRB can be divided into six subregions with similar temporal variability in monthly R. The water balance analyses indicated that approximately 75% of total water‐year R is generated by just one CRB subregion and that most of the R in the basin is derived from surplus (S) water generated during the months of October through April. Furthermore, the analyses show that temporal variability in S is largely controlled by the occurrence of negative atmospheric pressure anomalies over the northwestern conterminous U.S. (CONUS) and positive atmospheric pressure anomalies over the southeastern CONUS. This combination of atmospheric pressure anomalies results in an anomalous flow of moist air from the North Pacific Ocean into the CRB, particularly the Upper CRB. Additionally, the occurrence of extreme dry and wet periods in the CRB appears to be related to variability of the Atlantic Multidecadal Oscillation and the Pacific Decadal Oscillation.