10-year continuous U.S. climate simulations were conducted with the Regional Spectral Model (RSM) using boundary conditions from the National Centers for Environmental Prediction/Dept. of Energy reanalyses and the global PCM (Parallel Climate Model) simulations for present day (1986–1996) andfuture (2040–2050) CO2 concentrations (about a 36% increasedCO2). In order to examine the influence of physical parameterization differences as well as grid-resolution, fine resolution RSM simulations (50 km) were compared to coarse resolution (180 and 250 km) RSM simulations, which had resolutions comparable to the T62 reanalysis and PCM simulations. During the winter, the fine resolution RSM simulations provided more realistic detail over the western mountains. During the summer, large differences between the RSM and driving PCM simulations were found. Our results with presentCO2 suggest that most of the differences between the regionalclimate model simulations and the climate simulations driven by the global model used to drive the regional climate model were not due to the finer resolution of the regional climate model but to the different treatment of the physical processes in the two models, especially when the subgrid scale physics was important, like during summer. Compared to the coarse resolution RSM simulation results, on the other hand, the fine resolution RSM simulations did show improved simulation skills especially when a good boundary condition such as the reanalysis was used to drive the RSM. Under increased CO2, the driving PCM and downscaled RSM simulations exhibitedwarming over all vertical layers and all regions. Both the RSM and PCM had increased precipitation during the winter, but during the summer, the PCM simulation had an overall precipitation increase mainly due to increased subgrid scale convective activity, whereas the RSM simulations exhibited precipitation decreases and the resulting RSM soil moisture became dryer, especially in the U.S. Southwest. Most of differences in the simulated climate change signals were produced by the distinct model physics rather than by differences in grid resolution.