Satellite-based products with high spatial and temporal resolution provide useful precipitation information for data-sparse or ungauged large-scale watersheds. In the Lower Lancang-Mekong River Basin, rainfall stations are sparse and unevenly distributed, and the transboundary characteristic makes the collection of precipitation data more difficult, which has restricted hydrological processes simulation. In this study, daily precipitation data from four datasets (gauge observations, inverse distance weighted (IDW) data, Tropical Rainfall Measuring Mission (TRMM) estimates, and Climate Hazards Group InfraRed Precipitation with Stations (CHIRPS) estimates), were applied to drive the Soil and Water Assessment Tool (SWAT) model, and then their capability for hydrological simulation in the Lower Lancang-Mekong River Basin were examined. TRMM and CHIRPS data showed good performances on precipitation estimation in the Lower Lancang-Mekong River Basin, with the better performance for TRMM product. The Nash-Sutcliffe efficiency (NSE) values of gauge, IDW, TRMM, and CHIRPS simulations during the calibration period were 0.87, 0.86, 0.95, and 0.93 for monthly flow, respectively, and those for daily flow were 0.75, 0.77, 0.86, and 0.84, respectively. TRMM and CHIRPS data were superior to rain gauge and IDW data for driving the hydrological model, and TRMM data produced the best simulation performance. Satellite-based precipitation estimates could be suitable data sources when simulating hydrological processes for large data-poor or ungauged watersheds, especially in international river basins for which precipitation observations are difficult to collect. CHIRPS data provide long precipitation time series from 1981 to near present and thus could be used as an alternative precipitation input for hydrological simulation, especially for the period without TRMM data. For satellite-based precipitation products, the differences in the occurrence frequencies and amounts of precipitation with different intensities would affect simulation results of water balance components, which should be comprehensively considered in water resources estimation and planning.