In order to study the effects of lakes on weather modification, pollutant transport and deposition, the hydrodynamic equations were solved numerically on a variable horizontal and vertical grid. Time splitting was applied to couple an explicit pseudospectral and an implicit finite difference scheme. The resulted model difference equations were used to predict the local wind, temperature, and pressure fields as well as the evolution of the atmospheric planetary boundary layer parameters. The modeling domain was centered around a lake to investigate the potential impact of nearby industrial sources. The situation studied was characteristic of summertime conditions, driven by a synoptic weather system with air moving from land, over a cooler lake surface. This flow is shown to become highly modified by a mesoscale meteorological phenomenon known as lake-breeze. It is also shown that the presence of a lake limits pollutant deposition over its length, due to stabilization and plume entrainment in the lake-breeze. On the hand, deposition was enhanced over the upwind land due to the lake-breeze effect, and the downwind shore due to intense mxing. © 1989.