This paper describes a data assimilation method that uses observations of snow covered area (SCA) to update hydrologic model states in a mountainous catchment in Colorado. The assimilation method uses SCA information as part of an ensemble Kalman filter to alter the sub-basin distribution of snow as well as the basin water balance. This method permits an optimal combination of model simulations and observations, as well as propagation of information across model states. Sensitivity experiments are conducted with a fairly simple snowpack/water-balance model to evaluate effects of the data assimilation scheme on simulations of streamflow. The assimilation of SCA information results in minor improvements in the accuracy of streamflow simulations near the end of the snowmelt season. The small effect from SCA assimilation is initially surprising. It can be explained both because a substantial portion of snowmelts before any bare ground is exposed, and because the transition from 100% to 0% snow coverage occurs fairly quickly. Both of these factors are basin-dependent. Satellite SCA information is expected to be most useful in basins where snow cover is ephemeral. The data assimilation strategy presented in this study improved the accuracy of the streamflow simulation, indicating that SCA is a useful source of independent information that can be used as part of an integrated data assimilation strategy. ?? 2005 Elsevier Ltd. All rights reserved.