The changes between the ERA‐40 and ERA‐Interim in the seasonal cycle of primarily temperature, precipitation and evaporation, the surface radiation budget, and the cloud fields are evaluated over three river basins, the Amazon, Mississippi, and Mackenzie, for the period 1990–2001, using a variety of surface observational data sets and the International Satellite Cloud Climatology Project data. In ERA‐Interim over the Amazon, the unrealistic interannual drift of precipitation has been reduced, and annual precipitation is largely unbiased, although the seasonal amplitude of precipitation remains too small. However, ERA‐Interim has a large cold 2‐m temperature bias. The clear‐sky surface shortwave flux in ERA‐Interim is lower than that in ERA‐40 and closer to observations. Low cloud cover has increased dramatically in ERA‐Interim, and total reflective cloud cover has a larger positive bias in comparison with observations. The ratio of the precipitation heating of the atmosphere to the surface shortwave cloud forcing is much higher in the observations than that in both reanalyses. The diurnal cycle of precipitation has improved somewhat with the removal of a spurious early morning peak. For the Mississippi and Mackenzie river basins, the spin‐up of precipitation in 24‐h forecasts has been greatly reduced. Temperature biases are small in both reanalyses, but summer precipitation and evaporation exceed observational estimates. For the Mississippi river basin, reflective cloud cover in ERA‐Interim has increased in winter and decreased in summer compared with that in ERA‐40, giving a closer fit to the observations in both seasons. For the Mackenzie river basin, similar reflective cloud changes in ERA‐Interim improve the fit to the observations in summer but not in winter.