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In this study, a hybrid factorial stepwise-cluster analysis (HFSA) method is developed for modelling hydrological processes. The HFSA method employs a cluster tree to represent the complex nonlinear relationship between inputs (predictors) and outputs (predictands) in hydrological processes. A real case of streamflow simulation for the Kaidu River basin is applied to demonstrate the efficiency of the HFSA method. After training a total of 24 108 calibration samples, the cluster tree for daily streamflow is generated based on a stepwise-cluster analysis (SCA) approach and is then used to reproduce the daily streamflows for calibration (1995-2005) and validation (2008-2010) periods. The Nash-Sutcliffe coefficients for calibration and validation are 0.68 and 0.65, respectively, and the deviations of volume are 1.68% and 4.11%, respectively. Results show that: (i) the HFSA method can formulate a SCA-based hydrological modelling system for streamflow simulation with a satisfactory fitting; (ii) the variability and peak value of streamflow in the Kaidu River basin can be effectively captured by the SCA-based hydrological modelling system; (iii) results from 2 6 factorial experiments indicate that not only are minimum temperature and precipitation key drivers of system performance, but also the interaction between precipitation and minimum temperature significantly impacts on the streamflow. The findings are useful in indicating that the streamflow of the study basin is a mixture of snowmelt and rainfall water.