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A vectorized version of the biosphere-atmosphere transfer scheme (VBATS) is used to study moisture, energy, and momentum fluxes from heterogeneous land surfaces st the scale of an atmospheric model (AM) grid cells. To incorporate subgrid scale inhomogeneity, VBATS includes two important features: (1) characterization of the land surface (vegetation and soil parameters) at N subgrid points within an AM grid cell and (2) explicit distribution of climate forcing (precipitation, clouds, etc.) over the subgrid. In this study, VBATS is used in stand-alone mode to simulate a single AM grid cell and to evaluate the effects of subgrid scale vegetation and climate specification on the surface fluxes and hydrology. It is found that the partitioning of energy can be affected by up to 30%, runoff by 50%, and surface stress in excess of 60%. Distributing climate forcing over the AM grid cell increases the Bowen ratio, as a result of enhanced sensible heat flux and reduced latent heat flux. The combined effect of heterogeneous vegetation and distribution of climate is found to be dependent on the dominat vegetation class in the AM grid cell. Development of this method is part of a larger program to explore the importance of subgrid scale processes in regional and global climate simulations.