Accurate precipitation is crucial for hydrological modelling, especially in sparse gauge regions like the Lam River Basin (LRB) in Vietnam. Gridded precipitation data sets derived from satellite and numerical models offer significant advantages in such areas. However, satellite precipitation estimates (SPEs) are subject to uncertainties, especially in high variable of topography and precipitation. This study focuses on enhancing the accuracy of Integrated Multi-satellitE Retrievals for Global Precipitation Measurement (IMERG), Climate Prediction Center morphing technique (CMORPH) using the Quantile Mapping (QM) technique, aligning the cumulative distribution functions of the observed precipitation data with those of the SPEs, and assessing the impact on hydrological predictions. The study highlights that the post-correction IMERG precipitation using QM performs better than other data sets, enhancing the hydrological model's performance for the LRB at different temporal scales. Nash–Sutcliffe efficiency values increased from 0.60 to 0.77, surpassing the original IMERG's 0.52 to 0.74, and correlation coefficients improved from 0.79 to 0.89 (compared with the previous 0.75–0.86) for hydrological modelling. Additionally,Per cent Bias (PBIAS) decreased from approximately −1.66 to −2.21% (contrasting with the initial −20.22 and 4.6%) with corrected SPEs. These findings have implications for water resource management and disaster risk reduction initiatives in Vietnam and other countries.