This paper introduces and evaluates DryMOD, a dynamic water balance model of the key hydrological process in drylands that is based on free, public-domain datasets. The rainfall model of DryMOD makes optimal use of spatially disaggregated Tropical Rainfall Measuring Mission (TRMM) datasets to simulate hourly rainfall intensities at a spatial resolution of 1-km. Regional-scale applications of the model in seasonal catchments in Tunisia and Senegal characterize runoff and soil moisture distribution and dynamics in response to varying rainfall data inputs and soil properties. The results highlight the need for hourly-based rainfall simulation and for correcting TRMM 3B42 rainfall intensities for the fractional cover of rainfall (FCR). Without FCR correction and disaggregation to 1 km, TRMM 3B42 based rainfall intensities are too low to generate surface runoff and to induce substantial changes to soil moisture storage. The outcomes from the sensitivity analysis show that topsoil porosity is the most important soil property for simulation of runoff and soil moisture. Thus, we demonstrate the benefit of hydrological investigations at a scale, for which reliable information on soil profile characteristics exists and which is sufficiently fine to account for the heterogeneities of these. Where such information is available, application of DryMOD can assist in the spatial and temporal planning of water harvesting OPEN ACCESS Remote Sens. 2013, 5 6692 according to runoff-generating areas and the runoff ratio, as well as in the optimization of agricultural activities based on realistic representation of soil moisture conditions.