The identification and estimation of rainfall-flow models is one of the most challenging problems in hydrology. This paper presents the results of direct continuous-time identification and estimation of a rainfall-flow model for the Canning, an ephemeral river in Western Australia, based on daily sampled data. It compares simplified and full implementations of the optimal instrumental variable algorithm used in the application and discusses the advantages of this direct method when compared with the alternative indirect approach to the problem based on discrete-time model estimation.