We develop a core-modified dissipative particle dynamics model of colloidal systems which includes an extra term to counteract depletion forces. Results are presented covering the full range of volume fractions. Radial distribution functions for the suspending fluid are shown to change significantly as the volume fraction of colloid increases. Equilibrium results for the long-time diffusion coefficient behave as expected, but the short-time coefficient is anomalous. The form of the equilibrium stress correlation functions is discussed and the derived Green-Kubo viscosities are compared with expected semiempirical forms. For nonequilibrium shear-field simulations we find that the system temperature is not adequately controlled by the dissipative particle dynamics (DPD) thermostat alone. Results using three alternative auxiliary thermostats are compared; a naive choice leading to a string phase at high shear rate. Using a thermostat based on relative particle velocities, the model reproduced the four classical regions of colloid rheology: a first Newtonian plateau, a shear-thinning region, a second Newtonian plateau, and finally a shear-thickening region at high strain rate. The most unexpected result of this exercise is that the core-modified DPD model without auxiliary thermostat almost exactly follows the same curve despite recording a temperature increase of a factor approximately 2.5 over the range.