In this study, we configure the standard Weather Research and Forcast (WRF) 3.9 and WRF3.9 coupled with WRF-hydro 5.0 using a nested grid approach with an inner domain over a 100 km by 100 km domain centered around the U. S. Department of Energy Atmospheric Radiation Measurement (ARM) Facility’s Southern Great Plains (SGP) site, representative of a one-degree box used in current generation general circulation models. In both models, the land surface and subsurface of the domain in Noah-MP is discretized into 1 km for water and energy simulations in the vertical direction, while the lateral routing of overland, subsurface, and river flow is computed at 100 m resolution. Offline simulations of WRF-hydro are first conducted that are driven by meteorological forcing from the North American Land Data Assimilation System (NLDAS) for 2011 and 2012 to evaluate the effect of lateral water transport on surface energy and water budgets, benchmarked against observations from energy balance Bowen ratio (EBBR), eddy correlation (ECOR) stations, streamflow stations, and groundwater wells. The offline results suggest that conceptualizations of Lateral hydrologic processes have profound impacts on simulated surface energy budget. In general, lateral flow routing enhances soil moisture availability over SGP, by transporting water down the hillslope. In addition, the assumptions on sizes and connectivity of groundwater aquifers could alter surface energy budgets signifantly, as the aquifers could serve as sinks for extra soil water percolation, or as sources for replenishing soil moisture through capillary rise, depending on the hydrometeorologic condition. Based on the offline simualtions, the “optimal” WRF-hydro physics options/parameters are chosen for nested WRF simulations to explore how different representations of hydrologic processes affect land-atmosphere-clound interactions over SGP.