•Rainfallwas obtained fromTRMMdata for the period 1999–2008.•We model runoff and Water balance in the Tiaoxi catchment.•The gauge-adjusted TRMM 3B42 data can be a valuable tool for hydrologic modeling. Spatial rainfall data is an essential input to Distributed Hydrological Models (DHM), and a significant contributor to hydrological model uncertainty. Model uncertainty is higher when rain gauges are sparse, as is often the case in practice. Currently, satellite-based precipitation products increasingly provide an alternative means to ground-based rainfall estimates, in which case a rigorous product assessment is required before implementation. Accordingly, the twofold objective of this work paper was the real-world assessment of both (a) the Tropical Rainfall Measuring Mission (TRMM) rainfall product using gauge data, and (b) the TRMM product’s role in forcing data for hydrologic simulations in the area of the Tiaoxi catchment (Taihu lake basin, China). The TRMM rainfall products used in this study are the Version-7 real-time 3B42RT and the post-real-time 3B42. It was found that the TRMM rainfall data showed a superior performance at the monthly and annual scales, fitting well with surface observation-based frequency rainfall distributions. The Nash-Sutcliffe Coefficient of Efficiency (NSCE) and the relative bias ratio (BIAS) were used to evaluate hydrologic model performance. The satisfactory performance of the monthly runoff simulations in the Tiaoxi study supports the view that the implementation of real-time 3B42RT allows considerable room for improvement. At the same time, post-real-time 3B42 can be a valuable tool of hydrologic modeling, water balance analysis, and basin water resource management, especially in developing countries or at remote locations in which rainfall gauges are scarce.