The Global Precipitation Measurement (GPM) mission’s Dual-Frequency Precipitation Radar (DPR) serves as a critical benchmark for calibrating satellite-based precipitation products, with its retrieval quality directly governing the accuracy of global precipitation estimates. While the updated version 07 (DPR-V07) algorithm introduces substantial refinements over its predecessor (DPR-V06), systematic evaluations of its operational advancements in precipitation monitoring remain limited. This study utilizes ground-based rain gauge data from Mainland China (2015–2018) to assess improvements of DPR-V07 over its predecessor’s (DPR-V06) effects. The results indicate that DPR-V07 reduces the high-altitude precipitation underestimation by 5% (vs. V06) in the west (W) and corrects the elevation-linked overestimation via an improved terrain sensitivity. The seasonal analysis demonstrates winter-specific advancements of DPR-V07, with a 3–8% reduction in the miss bias contributing to a lower total bias. However, the algorithm updates yield unintended trade-offs: the High-Sensitivity Scan (HS) mode exhibits significant detection performance degradation, particularly in east (E) and midwest (M) regions, with Critical Success Index (CSI) values decreasing by approximately 0.12 compared to DPR-V06. Furthermore, summer error components show a minimal improvement, suggesting unresolved challenges in warm-season retrieval physics. This study establishes a systematic framework for evaluating precipitation retrieval advancements, providing critical insights for future satellite algorithm development and operational applications in hydrometeorological monitoring.