High-quality rainfall information is critical for accurate simulation of runoff and water cycle processes on the land surface. In situ monitoring of rainfall has a very limited utility at the regional and global scale because of the high temporal and spatial variability of rainfall. As a step toward overcoming this problem, microwave remote sensing observations can be used to retrieve the temporal and spatial rainfall coverage because of their global availability and frequency of measurement. This paper addresses the question of whether remote sensing rainfall estimates over a catchment can be used for water balance computations in the distributed hydrological model. The TRMM 3B42V6 rainfall product was introduced into the hydrological cycle simulation of the Yangtze River Basin in South China. A tool was developed to interpolate the rain gauge observations at the same temporal and spatial resolution as the TRMM data and then evaluate the precision of TRMM 3B42V6 data from 1998 to 2006. It shows that the TRMM 3B42V6 rainfall product was reliable and had good precision in application to the Yangtze River Basin. The TRMM 3B42V6 data slightly overestimated rainfall during the wet season and underestimated rainfall during the dry season in the Yangtze River Basin. Results suggest that the TRMM 3B42V6 rainfall product can be used as an alternative data source for large-scale distributed hydrological models.