An integrated hydrometeorological system was designed for the utilization of data from various sensors in the 3300 km² Panama Canal Watershed for the purpose of producing real-time, spatially distributed, mean areal rainfall estimates, and rainfall and flow forecasts. These forecasts are used by the Panama Canal Authority for water management. The system ingests raw data from a 10 cm weather radar, automated rain gauges and surface meteorological stations, streamflow gauges, radiosonde upper air profilers, and analysis and forecast fields from the operational 80 km Eta numerical weather prediction model of the US National Weather Service State estimators utilize all available data for cloud, soil and channel model state updating and rainfall and flow forecast variance generation. Merged radar and rain gage fields are produced in real time and are used to compute mean areal precipitation for each sub-catchment in the watershed. Results of real time operation for the years 2000 and 2001 show useful system forecasts during severe storm periods.