A digital twin basin serves as a virtual representation of a physical basin, enabling synchronous simulation, virtual–real interaction, and iterative optimization. The construction of a digital twin basin requires a basin database characterized by large-scale coverage, high-precision, high-resolution, and low-latency attributes. The advancements in remote sensing technology present a new technical means for acquiring essential variables of the basin. The purpose of this paper was to provide a comprehensive overview and discussion of the retrieval principle, data status, evaluation and inter-comparison, advantages and challenges, applications, and prospects of remote sensing technology in capturing seven essential variables, i.e., precipitation, surface temperature, evapotranspiration, water level, river discharge, soil moisture, and vegetation. It is indicated that remote sensing can be applied in some digital twin basin functions, such as drought monitoring, precipitation forecasting, and water resources management. However, more effort should be paid to improve the data accuracy, spatiotemporal resolution, and latency through data merging, data assimilation, bias correction, machine learning algorithms, and multi-sensor joint retrieval. This paper will assist in advancing the application of remote sensing technology in constructing a digital twin basin.