WetSpa is the acronym for Water and Energy Transfer between Soil, Plants and Atmosphere. A GIS-based distributed watershed model, WetSpa Extension, has been under development suitable for use of flood prediction and watershed management on catchment scale. The model is physically based and simulates hydrological processes of precipitation, snowmelt, interception, depression, surface runoff, infiltration, evapotranspiration, percolation, interflow, groundwater flow, etc. continuously both in time and space, for which the water and energy balance are maintained on each raster cell. Surface runoff is produced using a modified coefficient method based on the cell characteristics of slope, land use, and soil type, and allowed to vary with soil moisture, rainfall intensity and storm duration. Interflow is computed based on the Darcy's law and the kinematic approximation as a function of the effective hydraulic conductivity and the hydraulic gradient, while groundwater flow is estimated with a linear reservoir method on a small subcatchment scale as a function of groundwater storage and a recession coefficient. Special emphasis is given to the overland flow and channel flow routing using the method of linear diffusive wave approximation, which is capable to predict flow discharge at any converging point downstream by a unit response function. The model accounts for spatially distributed hydrological and geophysical characteristics of the catchment and therefore is suitable for studying the impact of land use change on the hydrological behaviours of a river basin.