Results are presented in which a physically-based, three-dimensional model that fully integrates surface and variably-saturated subsurface flow processes is applied to the 75 km2 Laurel Creek Watershed within the Grand River basin in Southern Ontario, Canada. The primary objective of this study is to gauge the model's ability to reproduce surface and subsurface hydrodynamic processes at the watershed scale. Our objective was first accomplished by calibrating the steady-state subsurface portion of the system to 50 observation wells where hydraulic head data were available, while simultaneously matching the stream baseflow discharge. The level of agreement between the observed and computed subsurface hydraulic head values, baseflow discharge and the spatial pattern of the surface drainage network indicates that the model captures the essence of the surface-subsurface hydraulic characteristics of the watershed. The calibrated model is then subjected to two time series of input rainfall data and the calculated discharge hydrographs are compared to the observed rainfall-runoff responses. The calculated and observed rainfall-runoff responses were shown to agree moderately well for both rainfall data series that were utilized. Additionally, the spatial and temporal responses of the watershed with respect to the overland flow areas contributing to streamflow and the surface-subsurface exchange fluxes across the land surface during rainfall inundation and subsequent drainage phases demonstrate the dynamic nature of the interaction occurring between the surface and subsurface hydrologic regimes. Overall, it is concluded that it is feasible to apply a fully-integrated, surface/variably-saturated subsurface flow model at the watershed scale and possibly larger scales.