The development of the Systeme Hydrologique Europeen (SHE) started in 1977 as a joint effort by three European organizations: Institute of Hydrology (UK), the French consulting firm SOGREAH and the Danish Hydraulic Institute. The SHE is often quoted in the literature as a prototype of the distributed, physically based group of models. In this paper the comprehensive results of further developments of the MIKE SHE version, which have taken place during the last five years, are summarized. MIKE SHE simulates water flow, water quality and soil erosion processes for the entire land phase of the hydrological cycle. It is intended for scientific and engineering hydrology. MIKE SHE is a fourth generation, user-friendly modelling package comprising a number of comprehensive pre-and post-processors including digitizing, graphical editing, contouring, grid-averaging and graphical presentation with options for display of animations.