This study shows the feasibility of the combined use of multi-satellite data and an energy–water balance model for improving the estimates of water fluxes over time and distributed in space in the Yangtze River basin. In particular, a new methodology is used to constrain an internal model variable of the distributed hydrological model based on the satellite land surface temperature. The hydrological FEST-EWB model (flash flood event-based spatially distributed rainfall–runoff transformation–energy water balance model) with its energy–water balance scheme allows to continuously compute in time and distributed in space soil moisture and evapotranspiration (ET) fluxes thanks to a double link with satellite-derived data as input parameters (e.g., LAI) and as variables for model states’ updates as the land surface temperature (LST). This LST was used to calibrate the model soil parameters instead of using only dedicated ground measurements. The effects of the calibration procedure were evaluated at four available river cross-sections along the Yangtze River, considering also the presence of the Three Gorges Dam. Flow duration curves were also considered to understand the volume storages’ changes. The Poyang and Dongting Lakes dynamics were simulated from FEST-EWB and compared against satellite water extended from MERIS and ASAR data and water levels from LEGOS altimetry data (Topex/Poseidon). The FEST-EWB model was run at 0.009° spatial resolution and three hours of temporal resolutions for the period between 2003 and 2006. Absolute errors on LST estimates of 3 °C were obtained while discharge data were simulated with errors of 10%. Errors on the water area extent of 7% and on the water level of 3% were obtained for the two lakes.