In the 21st century COE program, “Satellite Ecology”, regional climate model, namely SATECO model, has been developed to estimate spatial and temporal variations of carbon, water and heat fluxes with a high-resolution grid integrated ecological research, remote sensing analysis, and plot observations. SATECO model is based on meso-scale climate model MM5 and land surface model to estimate the fluxes determined by micro-meteorological variables and ecosystem-dependent parameters. LSM model has been validated for AsiaFlux TKC and TKY sites in intensive research area, Daihachiga river basin, Takayama, Japan. TKC and TKY sites were covered by an evergreen coniferous forest and a deciduous broad-leaf forest, respectively. They were representative forest types in East Asia. In present study, we introduce the concept of SATECO model and report the result of carbon and heat exchange analysis using tower flux data measured by eddy-covariance method, model validation using ecosystem field measurement data such as biomass, leaf area index, photosynthetic rubisco, and soil respiration rate, etc., and the estimation of spatial and temporal variations of carbon budget in Daihachiga river basin.