The Dischma is a typical high mountain valley in the alpine source area of the River Rhine. A knowledge of the daily and seasonal water balance is important for understanding and predicting the effects of climatic fluctuations on river discharge. Traditional methods of analysing the water cycle usually involve deriving evaporation from precipitation and discharge. However, in mountain regions single station precipitation and discharge data cannot simply be extrapolated to represent regional evaporation characteristics. Measurements of precipitation in mountains are both limited in accuracy and spatial representativeness in contrast to well-defined discharge data. Field measurements of evaporation in the Dischma valley recorded over five summers give a fairly accurate picture of this component over space and time. New results on the characteristics of evaporation, transpiration and condensation are obtained from automated evaporation pans, lysimeters and climatological stations. The water cycle can be defined with greater precision by measuring discharge and evaporation and deriving precipitation than the more traditional technique of deriving evaporation.