Karst watershed refers to the total range of surface and underground recharge areas of rivers (including subterranean rivers and surface rivers) in karst areas. Karst water resources, as the primary source of domestic water supply in southwest China, are vital for the social and economic development of these regions. These resources are greatly significant for guiding water resources management in karst areas to establish a high-precision hydrological model of karst watersheds. Choosing the Daotian river basin in the Wumeng Mountains of Southwest China as the study area, this paper proposed a method for simplifying karst subterranean rivers into surface rivers by modifying the digital elevation model (DEM) based on a field survey and tracer test. This method aims to solve the inconsistency between the topographical drainage divides and actual catchment boundaries in karst areas. The Soil and Water Assessment Tool (SWAT) model was modified by replacing the single-reservoir model in the groundwater module with a three-reservoir model to depict the constraints of multiple media on groundwater discharge in the karst system. The results show that the catchment areas beyond topographic watershed were effectively identified after simplifying subterranean rivers to surface rivers based on the modified DEM data, which ensured the accuracy of the basic model. For the calibration and two validation periods, the Nash–Sutcliffe efficiencies (NSE) of the modified SWAT model were 0.87, 0.83, and 0.85, respectively, and R2 were 0.88, 0.84, and 0.86, respectively. The NSE of the modified SWAT model was 0.09 higher than that of the original SWAT model in simulating baseflow, which effectively improved the simulation accuracy of daily runoff. In addition, the modified SWAT model had a lower uncertainty within the same parameter ranges than the original one. Therefore, the modified SWAT model is more applicable to karst watersheds.