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Bias correction is usually implemented prior to using climate model outputs for impact studies. However, bias correction methods that are commonly used treat climate variables independently and often ignore inter-variable dependencies. The effects of ignoring such dependencies on impact studies need to be investigated. This study aims to assess the impacts of correcting the inter-variable correlation of climate model outputs on hydrological modeling. To this end, a joint bias correction (JBC) method which corrects the joint distribution of two variables as a whole is compared with an independent bias correction (IBC) method; this is considered in terms of correcting simulations of precipitation and temperature from 26 climate models for hydrological modeling over 12 watersheds located in various climate regimes. The results show that the simulated precipitation and temperature are considerably biased not only in the individual distributions, but also in their correlations, which in turn result in biased hydrological simulations. In addition to reducing the biases of the individual characteristics of precipitation and temperature, the JBC method can also reduce the bias in precipitation-temperature (P-T) correlations. In terms of hydrological modeling, the JBC method performs significantly better than the IBC method for 11 out of the 12 watersheds over the calibration period. For the validation period, the advantages of the JBC method are greatly reduced as the performance becomes dependent on the watershed, GCM and hydrological metric considered. For arid/tropical and snowfall-rainfall-mixed watersheds, JBC performs better than IBC. For snowfall- or rainfall-dominated watersheds, however, the two methods behave similarly, with IBC performing somewhat better than JBC. Overall, the results emphasize the advantages of correcting the P-T correlation when using climate model-simulated precipitation and temperature to assess the impact of climate change on watershed hydrology. However, a thorough validation and a comparison with other methods are recommended before using the JBC method, since it may perform worse than the IBC method for some cases due to bias nonstationarity of climate model outputs. [ABSTRACT FROM AUTHOR]