Between September 5, 2008 and September 5, 2009, near-surface soil moisture time series were collected in the northern part of a 1.7 km2 watershed in SW Hungary at 14 monitoring locations using a portable TDR-300 soil moisture sensor. The objectives of this study are to increase the accuracy of soil moisture measurement at watershed scale, to improve flood forecasting accuracy, and to optimize soil moisture sensor density. According to our results, in 10 of 13 cases, a strong correlation exists between the measured soil moisture data of Station 5 and all other monitoring stations; Station 5 is considered representative for the entire watershed. Logically, the selection of the location of the representative measurement point(s) is essential for obtaining representative and accurate soil moisture values for the given watershed. This could be done by (i) employing monitoring stations of higher number at the exploratory phase of the monitoring, (ii) mapping soil physical properties at watershed scale, and (iii) running cross-relational statistical analyses on the obtained data. Our findings indicate that increasing the number of soil moisture data points available for interpolation increases the accuracy of watershed-scale soil moisture estimation. The data set used for interpolation (and estimation of mean antecedent soil moisture values) could be improved (thus, having a higher number of data points) by selecting points of similar properties to the measurement points from the DEM and soil databases. By using a higher number of data points for interpolation, both interpolation accuracy and spatial resolution have increased for the measured soil moisture values for the Pósa Valley.