Rising surface air temperatures in response to anthropogenic forcing are intensifying the global hydrologic cycle. Some of the more dramatic signs of climate change are increasing precipitation, evaporation, and freshwater discharge in continental river basins draining to high-latitude oceans. At regional scales, however, an acceleration of the hydrologic cycle is not always detected. In contrast to its major Eurasian counterparts, the North American Hudson Bay Basin experienced a 15% decline in river runoff between 1964 and 1994. It is shown that the Arctic Oscillation explains with statistical significance up to 90% of the recent variability in Hudson Bay river discharge. This study reveals the important role of large-scale atmospheric phenomena such as the Arctic Oscillation in regulating the terrestrial hydrologic budget. The ability of weather and climate models to represent these interannual to decadal scale phenomena governs their predictions of the surface water budget's future state in a changing climate.