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Vegetation and land-surface hydrology are intrinsically linked under long-term climate change. This paper aims to evaluate the dynamics of potential natural vegetation arising from 21st century climate change and its possible impact on the water budget of the Hanjiang River basin in China. Based on predictions of the Intergovernmental Panel on Climate Change Special Report on Emissions Scenarios (IPCC-SRES) A1 scenario from the PRECIS (Providing Regional Climates for Impact Studies) regional climate model, changes in plant functional types (PFTs) and leaf area index (LAI) were simulated via the Lund-Potsdam-Jena dynamic global vegetation model. Subsequently, predicted PFTs and LAIs were employed in the Xinanjiang vegetation-hydrology model for rainfall-runoff simulations. Results reveal that future long-term changes in precipitation, air temperature and atmospheric CO2 concentration would remarkably affect the spatiotemporal distribution of PFTS and LAIS. These climate-driven vegetation changes would further influence regional water balance. With the decrease in forest cover in the 21st century, plant transpiration and evaporative loss of intercepted canopy water will tend to fall while soil evaporation may rise considerably. As a result, total evapotranspiration may increase moderately with a slight increase in annual runoff depth. This indicates that, for long-term hydrological prediction, climate-induced changes in terrestrial vegetation cannot be neglected as the terrestrial biosphere plays an important role in land-surface hydrological responses. [ABSTRACT FROM AUTHOR]