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Watershed management, disaster warning, and hydrological modeling require accurate spatiotemporal precipitation data sets. This paper presents a comprehensive assessment of a gauge-satellite-based precipitation product that merges the Precipitation Estimation from Remotely Sensed Information using Artificial Neural Networks-Climate Data Record (PERSIANN-CDR) satellite precipitation product (SPP) and ground precipitation data at 134 rain gauges in the Xijiang River basin, South China. Two regression-based schemes, principal component regression (PCR) and multiple linear regression (MLR), were used to combine the gauge-based precipitation data and PERSIANN-CDR SPP and were compared at daily and annual scales. Furthermore, a hydrological model Variable Infiltration Capacity was used to calculate streamflow and to evaluate the impact of four different precipitation interpolation methods on the results of the hydrological model at the daily scale. The result shows that the PCR method performs better than MLR and can effectively eliminate the interpolation anomalies caused by terrain differences between observation points and surrounding areas. On the whole, the combined scheme consistently exhibits good performance and thus serves as a suitable tool for producing high-resolution gauge-and satellite-based precipitation datasets. [ABSTRACT FROM AUTHOR]