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Abstract Knowledge of the internal renewable water resources of a country is strategic information which is needed for long‐term planning of a nation's water and food security, among many other needs. New modelling tools allow this quantification with high spatial and temporal resolution. In this study we used the program Soil and Water Assessment Tool (SWAT) in combination with the Sequential Uncertainty Fitting program (SUFI‐2) to calibrate and validate a hydrologic model of Iran based on river discharges and wheat yield, taking into consideration dam operations and irrigation practices. Uncertainty analyses were also performed to assess the model performance. The results were quite satisfactory for most of the rivers across the country. We quantified all components of the water balance including blue water flow (water yield plus deep aquifer recharge), green water flow (actual and potential evapotranspiration) and green water storage (soil moisture) at sub‐basin level with monthly time‐steps. The spatially aggregated water resources and simulated yield compared well with the existing data. The study period was 1990–2002 for calibration and 1980–1989 for validation. The results show that irrigation practices have a significant impact on the water balances of the provinces with irrigated agriculture. Concerning the staple food crop in the country, 55% of irrigated wheat and 57% of rain‐fed wheat are produced every year in water‐scarce regions. The vulnerable situation of water resources availability has serious implications for the country's food security, and the looming impact of climate change could only worsen the situation. This study provides a strong basis for further studies concerning the water and food security and the water resources management strategies in the country and a unified approach for the analysis of blue and green water in other arid and semi‐arid countries. Copyright © 2008 John Wiley & Sons, Ltd.