The problem of dealing with the formulation of water management policy for the area of south Florida within the Central and Southern Florida Flood Control District was undertaken. The objectives were to (a) propose an organizational framework in which hydrologic, economic, and institutional aspects of the region may be used in policy development, (b) develop a simulation model which includes the salient hydrologic, economic, and institutional features of the Upper Kissimmee River Basin to serve as a guide, (c) demonstrate the usefulness of the simulation model in policy evaluations, and (d) determine the appropriateness of the approach for use in policy problems encountered when dealing with a large region. A first-generation simulation model of the hydrologic phenomena and water-oriented activities in the Upper Kissimmee River Basin was developed. Models of the surface water management system, the water use activities, and the institutional constraints were interfaced with rainfall and watershed runoff models.