The spatial variation of soil and vegetation types in a catchment adds complexity to the assessment of catchment water balance. At inter- and intra-annual time scales, partitioning of precipitation into evapotranspiration, runoff, soil water storage and drainage is controlled by interactions between climate, soil and plant types. Spatial variation of soil properties with topography offers opportunity for different land use options and leads to temporal and spatial heterogeneity of plant or vegetation types, which, in turn, impact on overall catchment hydrology and system sustainability. This simulation study explores a bottom-up modelling approach to investigate the impact of spatial/temporal variability of soil and vegetation types on water balance at Simmons Creek catchment, NSW, Australia. The catchment covers an area of 178 km2 and was divided into sub-catchments; each of the sub-catchment was further divided into three land units from the top hill to valley floor corresponding to the Multi-Resolution Valley Bottom Flatness (MRVBF) topographic index. Each land unit may contain multiple soil types. The hydraulic properties of each soil type were derived by combining soil mapping and detailed profile measurement data. A farming system simulator was coupled with a catchment hydrological framework to enable analysis of different soil-plant combinations and climate variability as they impact on the catchment water balance. These land use options were arranged in different configurations down the topographic sequence of the three hydrologically interconnected slope units in each of the sub-catchments. The dynamics of evapotranspiration (transpiration by plant and evaporation from soil), surface runoff, subsurface lateral flow, soil storage in the plant root zone, and drainage passing the root zone were analysed for the designed configurations. Simulation results indicate that differences in soil profile depth and topography, together with climate variability, restrict the potential of using alternative vegetation to modify catchment water balance. Inter- and intra- annual catchment water balance is influenced by spatial/temporal variation of soils and vegetation types in addition to climate variability and the fractions of different vegetation covers. The impact of spatial variation of shallow and deep rooted vegetations on surface and subsurface lateral flow is relatively small. The biggest impact is on potential soil water storage, plant water use and drainage from the land units where the vegetations were planted. This offers opportunities for designing spatially explicit mosaic land use towards more sustainable production systems. In the studied catchment, the management of runoff and re-infiltration is very significant in terms of reducing deep drainage at sub-catchment scale, surface runoff processes offer opportunity for ‘harvesting' water on down-slope land units to maximise evapotranspiration and minimise drainage. The most effective locations to plant perennial vegetation for the purposes of recharge reduction are not necessarily on up-slope land units – soil and slope characteristics should be carefully considered and down-slope water harvesting opportunities evaluated. Conversely to the water harvesting objective, if the aim is to maintain runoff and stream flow (water yield) then (assuming flow can be captured in channels) planting high water use vegetation on low land units is likely to be counterproductive. The coupling of the farming systems model with a catchment hydrological framework made it possible to capture the management details at farm level and the hydrological responses at catchment level. This has enabled analysis of realistic farm management options as they impact on the catchment water balance. Previously catchment hydrological tools have generally not explicitly represented farming systems and farming system simulators have not realistically represented lateral fluxes of water.