On 3 November 1993 a new higher-resolution version of the regional forecast system was implemented into operations at the Canadian Meteorological Centre. The changes include modifications to the regional data assimilation system and to the regional finite-element (RFE) forecast model. The main features of the new version of the RFE model include an increase in resolution from 100 to 50 km and to 25 sigma levels in the vertical. The fields that describe the surface characteristics are generated directly on the 50-km grid of the model from high-resolution global geophysical datasets, yielding more derails and a much better definition of the orography and coastlines. The new RFE model also includes an improved package of physical parametrizations, notably for condensation and radiation processes. The major changes to the data assimilation are a higher-resolution analysis, and the assimilation of humidity profiles retrieved from satellite imagery.The new system is evaluated using performance statistics, and case studies are presented to highlight some of the benefits. These include more accurate analyses with a better fit to the data, and more detailed and precise forecasts, particularly for frontal zone structures, jet streams, moisture distribution and precipitation. The new physics package reduces the spinup of the model and the systematic errors in precipitation amounts, and gives better thermal and hydrologic balances.