The NCAR Community Climate Model, Version 2, uses the spectral transform method for the underlying dry dynamical fluid flow component, and a monotonic, semi-Lagrangian transport algorithm for water vapor specific humidity. The reasons for this choice of 2 different approaches for these different components are reviewed, and the details of the implementation of the transport algorithm are presented. The properties of the transport scheme are described in the context of a 20-year control simulation. This simulation is also compared to one using the spectral transform method for water vapor transport. Neither numerical approach is perfect. The semi-Lagrangian method requires arbitrary corrections to conserve mass, and the spectral method requires the filling of nonphysical negative values of specific humidity. The analysis shows that the balance of processes that produces the climate of CCM2 is very sensitive to the discrete water vapor transport algorithm. The spectral transport method clearly has shortcomings. The negative filler is a dominant process in significant regions and leads to an incorrect balance of the moisture budget. The mass conservation adjustment of the semi-Lagrangian method seems to be cosmetic and has no identified adverse effect on the simulation. DOI: 10.1034/j.1600-0870.1994.00004.x