Water cycle analysis in the Cheonggyecheon watershed(river length: 13.75 km, area: $50.96;km^2$) was performed using WEP model, a physically based distributed rainfall-runoff model. As the application results of the model, the hydrological characteristics of the Cheonggyecheon watershed are significantly consistent with those of a typical urbanized watershed. The direct runoff from the watershed was larger and the evapotranspiration. was lower, and the response of runoff to rainfall was occurred very fast, as compared to forest watersheds. The river channel routing simulation results are similar to the change pattern and scale of the field data. The possible supply period of instream flow from Cheonggyecheoon watershed itself was estimated using WEP. According to the WEP simulation results for the annual water balance of the Cheonggyecheon watershed in 2002, the amount of direct runoff, infiltration and evapotranspiration were 830 mm, 388 mm and 397 mm respectively for an annual precipitation of 1,388 mm. The runoff to rivers was 1,288 mm. And the proportion of direct runoff, intermediate runoff and groundwater runoff were $67.6\%,;12.7\%$ and $19.7\%$ respectively.