Observational analyses and mesoscale modeling studies, using the Weather Research and Forecasting (WRF) model, are used to dissect the mechanisms associated with record lightning, rainfall, and flooding over the Baltimore metropolitan region on 7 July 2004. Storm evolution on 7 July 2004 exhibited characteristic features of warm season thunderstorms producing flash flooding over the Baltimore–Washington DC metropolitan region. The storm system was initiated along the Blue Ridge mountains, with model simulations suggesting that convergence-induced spin-up of a meso-low was responsible for initial thunderstorm development. Observations and model analyses show that thermal effects associated with Chesapeake Bay had a pronounced impact on storm evolution and rainfall distribution. Analyses of radar reflectivity and lightning observations suggest that the urban environment played a significant role in storm evolution and heavy rainfall distribution. Model analyses show that urban canopy effects from both the Baltimore and Washington DC urban regions play an important role in determining the storm environment associated with heavy rainfall. Urban Heat Island effects did not play a significant role in the storm evolution. Observations of aerosols and drop-size distributions from a vertically pointing LIDAR and a disdrometer and model analyses suggest that the aerosols may have played an important role in stimulating efficient precipitation mechanisms and extreme rainfall rates for the 7 July 2004 storm.