The Mackenzie River is one of the major river systems of the world. The Mackenzie River Basin (MRB) covers about 1.8 million km2 or about 20% of the total Canadian land mass, and the discharge from this river represents the largest single North American source of fresh water for the Arctic Ocean. The hydrological processes that occur within the MRB can thus have significant effects on the climate at both the regional and larger-scales. In this study, the atmospheric and surface water budgets of the MRB are evaluated by using several global and regional observational, (re-) analysis, and model datasets. The accuracy of the global datasets in representing the basin-scale water cycle are assessed by using the generally higher resolution and higher quality (but usually with more limited availability and accessibility) regional observation and analysis data as references. Diagnostics of regional water cycle processes such as precipitation recycling are performed to interpret some of the budget results as well as the differences exhibited in the budget estimates from the different datasets. Implications of the results of the study to the hydroclimate modeling of northern basins, and to the use of global datasets (e.g. the widely available NCEP and ECMWF reanalysis datasets) in hydroclimate studies of northern continental regions will also be discussed.