On the basis of long time series of climate and discharge in 108 nonhumid catchments in China this study analyzes the spatial and temporal variability of annual water-energy balance using the Budyko hypothesis. For both long-term means and annual values of the water balances in the 108 catchments, Fu's formula derived from the Budyko hypothesis is confirmed. A high correlation and relatively small systematic error between the values of parameter ϖ in Fu's equation optimized from the water balance of individual year and calibrated from the long-term mean water balance show that Fu's equation can be used for predicting the interannual variability of regional water balances. It has been found that besides the annual climate conditions the regional pattern of annual water-energy balance is also closely correlated with the relative infiltration capacity (Ks/ir), relative soil water storage (Smax/E0), and the average slope (tan β). This enables one to estimate the parameter ϖ from catchment characteristics without calibration from the long time series of water balances. An empirical formula for the parameter ϖ in terms of the dimensionless landscape parameters is proposed. Applications of Fu's equation together with the parameter ϖ estimated by this empirical formula have shown that Fu's equation can predict both long-term mean and annual value of actual evapotranspiration accurately and predict both long-term mean and interannual variability of runoff reasonably. This implies that the Fu's equation can be used for predicting the annual water balance in ungauged basins.