Abstract: A two-dimensional numerical model was developed to simulate local-scale circulations over inhomogenous terrain under stable conditions. A horizontal smoother was used in lieu of explicit horizontal diffusions. An improved finite difference scheme for approximating horizontal derivates in a terrain-following coordinate system was introduced. With this methodology. the error in calculation of the horizontal advection could be greatly reduced, especially in situations where the terrain is steep and the vertical grid space is small.By using this model, some experiments have been carried out under ideal conditions. The results show that the model has the capacity of simulating local-scale circulations. The model is also used to simulate the local-scale circulations induced by mountain, city island and water surface in Chongqing. The results are in good agrement with observations.