Abstract. A coupled carbon and water flux model (BIOME2) captures the broad-scale environmental controls on the natural distribution of vegetation structural and phenological types in Australia. Model input consists of latitude, soil type, and mean monthly climate (temperature, precipitation, and sunshine hours) data on a 1/10° grid. Model output consists of foliage projective cover (FPC) for the quantitative combination of plant types that maximizes net primary production (NPP). The model realistically simulates changes in FPC along moisture gradients as a consequence of the trade-off between light capture and water stress. A two-layer soil hydrology model also allows simulation of the competitive balance between grass and woody vegetation including the strong effects of soil texture.