New land-surface hydrologic parameterizations are implemented into the NASA Goddard Institute for Space Studies (GISS) General Circulation Model (GCM). These parameterizations are: 1) runoff and evapotranspiration functions that include the effects of subgrid-scale spatial variability and use physically based equations of hydrologic flux at the soil surface and 2) a realistic soil moisture diffusion scheme for the movement of water and root sink in the soil column. A one-dimensional climate model with a complete hydrologic cycle is used to screen the basic sensitivities of the hydrological parameterizations before implementation into the full three-dimensional GCM. Results of the final simulation with the GISS GCM and the new land-surface hydrology indicate that the runoff rate, especially in the tropics, is significantly improved. As a result, the remaining components of the heat and moisture balance show similar improvements when compared to observations. The validation of model results is carried from the large global (ocean and land-surface) scale to the zonal, continental, and finally the regional river basin scales.