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Hydrologic models are twofold: models for understanding physical processes and models for prediction. This study addresses the latter, which modelers use to predict, for example, streamflow at some future time given knowledge of the current state of the system and model parameters. In this respect, good estimates of the parameters and state variables are needed to enable the model to generate accurate forecasts. In this paper, a dual state-parameter estimation approach is presented based on the Ensemble Kalman Filter (EnKF) for sequential estimation of both parameters and state variables of a hydrologic model. A systematic approach for identification of the perturbation factors used for ensemble generation and for selection of ensemble size is discussed. The dual EnKF methodology introduces a number of novel features: (1) both model states and parameters can be estimated simultaneously; (2) the algorithm is recursive and therefore does not require storage of all past information, as is the case in the batch calibration procedures; and (3) the various sources of uncertainties can be properly addressed, including input, output, and parameter uncertainties. The applicability and usefulness of the dual EnKF approach for ensemble streamflow forecasting is demonstrated using a conceptual rainfall-runoff model. © 2004 Elsevier Ltd. All rights reserved.