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A Dynamic Watershed Simulation Model (DWSM) was developed at the Illinois State Water Survey to simulate surface and subsurface storm water runoff, propagation of flood waves, soil erosion, and transport of sediment and agricultural chemicals in agricultural and rural watersheds. The hydrology and soil erosion-sediment transport components were tested (calibrated and validated) on the Big Ditch watershed in Illinois, a 100-square-kilometer tributary subwatershed of the Upper Sangamon River basin draining into Lake Decatur. Two different divisions of the watershed, one with coarse subdivisions and the other with fine subdivisions were used in the simulations to investigate scaling effects on parameter values and model results. The fine divisions of the Big Ditch watershed did not add noticeable accuracy to the model results; however, the spatially averaged model parameters were different from the coarse divisions. The overland roughness for the coarse division was one third of the roughness for the fine division whereas the effective lateral saturated hydraulic conductivity was five times of the same, which are all due to the presence of more channel features in the coarse overland segments. The flow detachment coefficient for the coarse divisions was two thirds of its value for the fine divisions due to longer slope lengths in the coarse segments with higher flows and higher erosion potentials.