This study reports results from evaluation of the quality of digital elevation model (DEM) from four sources viz. topographic map (1: 50,000), Shuttle Radar Topographic Mission (SRTM) (90 m), optical stereo pair from ASTER (15 m) and CARTOSAT (2.5 m) and their use in derivation of hydrological response units (HRUs) in Sitla Rao watershed (North India). The HRUs were derived using water storage capacity and slope to produce surface runoff zones. The DEMs were evaluated on elevation accuracy and representation of morphometric features. The DEM derived from optical stereo pairs (ASTER and CARTOSAT) provided higher vertical accuracies than the SRTM and topographic map-based DEM. The SRTM with a coarse resolution of 90 m provided vertical accuracy but better morphometry compared to topographic map. The HRU maps derived from the fine resolution DEM (ASTER and CARTOSAT) were more detailed but did not provide much advantage for hydrological studies at the scale of Sitla Rao watershed (5800 ha).