A distributed physically based model, soil and water assessment tool (SWAT), and a distributed conceptual model, distributed large basin runoff model (DLBRM), were selected to compare their applicability and performance in simulating daily runoff in the Heihe River watershed, the second-largest inland river (terminal lake) with a peak elevation of 5,584 m above sea level (asl) in arid northwest China. Both models have been calibrated against the observed daily runoff at the watershed outlet (Yingluoxia Hydrological Station) for the period of 1995–2004 and validated for the period of 2005–2009. Results show that both SWAT and DLBRM produced reasonable results in this study, and DLBRM performed better than SWAT. The difference in performance is mainly due to data constraints, different interpolation schemes, and spatial representations of landscape variations in the models. The tank storage-output principle used in DLBRM seems more suitable than the Soil Conservation Service curve number (SCS-CN) me...