We describe the first use of a general circulation model to study the Martian water cycle. Water is treated as a passive tracer, except for ice-albedo coupling. The model is used to assess which mechanisms and water reservoirs are critical to the seasonal evolution of water and specifically the attainment of an interannually repeatable steady state. The model comes to a reasonable steady state with active surface ice and atmospheric vapor and ice reservoirs. A regolith is not necessary. The mechanism of equilibration results from independent parameters controlling the transport of water between the northern polar and the extratropical atmospheres at different seasons. Water export from the northern summer pole results from weak mixing across a strong vapor gradient, dependent upon northern cap temperatures. Import at other seasons depends on stronger mixing and weak vapor gradients, which are history dependent. Equilibration is achieved when the fluxes balance, minus a small net loss to the south. We find that with a southern residual CO2 cap, the water cycle cannot be completely closed. We conclude that the northern summer cap temperature determines the bulk humidity of the atmosphere, all else being equal. We proceed to show that a water cap exposed in southern summer would be unstable with respect to the north for dynamical as well as thermal reasons. At high obliquity (45°), much higher vapor abundances result in more widespread surface ice with seasonal ice caps overlapping in the equinoctial subtropics, producing year-round stability of water ice just north of the equator.