Traditionally, watershed-scale hydrology is simulated by distributed hydrological models with offline meteorological forcing data, or by regional regional climate models that link atmospheric and land hydrology interactions. Global climate model (GCMs) are rarely used to study watershed-scale hydrology due to the relatively coarse grid resolution, computationally expensive downscaling, and simplified physical processes. Recently, however, watershed-scale hydrology analysis has become possible in GCMs due to the development of variable-resolution GCMs that dynamically couple the hydrological processes between atmospheric and land systems at fine resolutions in selected regions and coarse resolution elsewhere. In this study, we used the variable-resolution Community Earth System Model (VR-CESM) with refined-resolution (14 km) in the western U.S. and eastern China to evaluate smaller watershed-scale hydrology. We compared the historical VR-CESM outputs with gauge measurements and other hydrological models (e.g., National Water Model in the U.S.) and calibrated the subsurface runoff capacities in four mountainous watersheds. An RCP8.5 projection from 2007 to 2050 is used to estimate the impact of changing precipitation and snow climatology on watershed hydrology. We also analyzed the long-term runoff variability and the possibility of extreme runoff events as simulated by the VR-CESM. Although calibration is not possible in larger-scale watersheds, VR-CESM simulates the long-term annual variability of watersheds and provides insights on climate change impacts on hydrology. We conclude that refined-resolution VR-CESM can be used for watershed-scale hydrology analysis to understand water resources and water balance, in addition to traditional watershed-scale hydrological models. It enables hydrological analysis at multiple watersheds in one simulation and can help understand the two-way dynamics between land surface hydrology and atmospheric processes, and is especially practical for projecting climate change impacts. However, it is challenging to apply VR-CESM for hydrologic analysis in regulated watersheds as human factors (e.g., pumping, irrigation, water diversion) have not been fully addressed in VR-CESM.