This paper outlines a new statistical downscaling method based on a stochastic weather generator. The monthly climate projections from global climate models (GCMs) are first downscaled to specific sites using an inverse distance-weighted interpolation method. A bias correction procedure is then applied to the monthly GCM values of each site. Dailyclimate projections for the site are generated by using a stochastic eather generator, WGEN. For downscaling WGEN parameters, historical climate data from 1889 to 2008 are sorted, in an ascending order, into 6 climate groups. The WGEN parameters are downscaled based on the linear and non-linear relationships derived from the 6 groups of historical climates and future GCM projections. The overall averaged onfidence intervals for these significant linear relationships between parameters and climate variables are 0.08 and 0.11 (the range of these parameters are up to a value of 1.0) at the observed mean andmaximum values of climate variables, revealing a high confidence in extrapolating parameters for downscaling future climate. An evaluation procedure is set up to ensure that the downscaled daily sequences are consistent with monthly GCM output in terms of monthly means or totals. The performance of this model is evaluated through the comparison between the distributions of measured and downscaled climate data. Kruskall-Wallis rank (K-W) and Siegel-Tukey rank sum dispersion (S-T) tests are used. The results show that the method can reproduce the climate statistics at annual, monthly and daily time scales for both training and validation periods. The method is applied to 1062 sites across New South Wales (NSW) for 9 GCMs and three IPCC SRES emission scenarios, B1, A1B and A2, for the period of 1900'2099. Projected climate changes by 7 GCMs are also analyzed for the A2 emission scenario based on the downscaling results.