Unfortunately, for various reasons, in-situ rain gauge networks are diminishing, especially in southern Africa, resulting in sparse networks whose records give a poor representation of rainfall occurrence, patterns and magnitudes. Hydrological models are used to inform decision making; however, model performance is directly linked to the quality of input data, such as rainfall. Therefore, the use of satellite-derived rainfall is being increasingly advocated as a viable alternative or supplement. The aim of this study was to evaluate the representativeness of satellite-derived rainfall and its utility in the ACRU agro-hydrological model to simulate streamflow magnitudes, distributions and patterns. The satellite-derived rainfall products selected for use in this study were TRMM3B42, FEWSARC2.0, FEWSRFE2.0, TAMSAT 3.0 and GPM-IMERG4. The satellite rainfall products were validated against available historical observed records and then were used to drive simulations using the ACRU agro-hydrological model in the upper uMngeni, upper uThukela and upper and central Breede catchments in South Africa. At the daily timescale, satellite-derived and observed rainfall were poorly correlated and variable among locations. However, monthly, seasonal and yearly rainfall totals and simulated streamflow volumes were in closer agreement with historical observations than the daily correlations; more so in the upper uMngeni and uThukela than in the upper and central Breede (e.g. FEWSARC2.0 and FEWSRFE2.0, producing relative volume errors of 3.18%, 4.63%, −5.07% and 2.54%, 9.54%, −1.67%, respectively, at Gauges V2E002, 0268883 and 02396985). Therefore, the satellite-derived rainfall shows promise for use in applications operating at coarser temporal scales than at finer daily ones. Complex topographical rainfall generation and varying weather systems, e.g. frontal rainfall, affected the accuracy of satellite-derived product estimates. This study focused on utilising the wealth of available raw satellite data; however, it is clear that the raw satellite data need to be corrected for bias and/or downscaled to provide more accurate results.