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Abstract The state-of-the-art AOGCM simulations have recently (late 2004–early 2005) been completed for the Intergovernmental Panel on Climate Change (IPCC) in order to provide input to the IPCC’s Fourth Assessment Report (AR4). The present paper synthesizes the new simulations of both the twentieth- and twenty-first-century arctic freshwater budget components for use in the IPCC AR4, and attempts to determine whether demonstrable progress has been achieved since the late 1990s. Precipitation and its difference with evapotranspiration are addressed over the Arctic Ocean and its terrestrial watersheds, including the basins of the four major rivers draining into the Arctic Ocean: the Ob, the Yenisey, the Lena, and the Mackenzie. Compared to the previous [IPCC Third Assessment Report (TAR)] generation of AOGCMs, there are some indications that the models as a class have improved in simulations of the Arctic precipitation. In spite of observational uncertainties, the models still appear to oversimulate area-averaged precipitation over the major river basins. The model-mean precipitation biases in the Arctic and sub-Arctic have retained their major geographical patterns, which are at least partly attributable to the insufficiently resolved local orography, as well as to biases in large-scale atmospheric circulation and sea ice distribution. The river discharge into the Arctic Ocean is also slightly oversimulated. The simulated annual cycle of precipitation over the Arctic Ocean is in qualitative agreement between the models as well as with observational and reanalysis data. This is also generally the case for the seasonality of precipitation over the Arctic Ocean’s terrestrial watersheds, with a few exceptions. Some agreement is demonstrated by the models in reproducing positive twentieth-century trends of precipitation in the Arctic, as well as positive area-averaged P–E late-twentieth-century trends over the entire terrestrial watershed of the Arctic Ocean. For the twenty-first century, three scenarios are considered: A2, A1B, and B1. Precipitation over the Arctic Ocean and its watersheds increases through the twenty-first century, showing much faster percentage increases than the global mean precipitation. The arctic precipitation changes have a pronounced seasonality, with the strongest relative increase in winter and fall, and the weakest in summer. The river discharge into the Arctic Ocean increases for all scenarios from all major river basins considered, and is generally about twice as large as the increase of freshwater from precipitation over the Arctic Ocean (70°–90°N) itself. The across-model scatter of the precipitation increase for each scenario is significant, but smaller than the scatter between the climates of the different models in the baseline period.