The combined use of remote sensing and a distributed hydrological model have demonstrated the improved understanding of the entire water balance in an area where data are scarcely available. Water use and crop water productivity were assessed in the Upper Bhima catchment in southern India using an innovative integration of remotely sensed evapotranspiration and a process-based hydrological model. The remote sensing based Surface Energy Balance Algorithm for Land (SEBAL) was used to derive an 8 month time series of observed actual evapotranspiration from October 2004 to May 2005. This dataset was then used in the calibration of the Soil and Water Assessment Tool (SWAT). This hydrological model was calibrated by changing 34 parameters to minimize the difference between simulated and observed actual evapotranspiration. The calibration efficiency was assessed with four different performance indicators. The calibrated model was used to derive a monthly basin water balance and to assess crop water productivity and crop water use for the irrigation year 2004-2005. It was found that evapotranspiration is the largest water loss in the catchment and total evaporative depletion was 38,172 Mm3 (835 mm). Of the total evaporative depletion 42% can be considered as non-beneficial and could be diverted to other beneficial utilization. Simulated crop water productivities for sugarcane, sorghum and winter wheat are relatively high at 2.9 kg/m3, 1.3 kg/m3 and 1.3 kg/m3, respectively. The frequency distributions of crop water productivity are characterised by low coefficient of variation, yielding limited scope for improvement in the agricultural areas under the current cropping systems. Further improvements in water productivity may however be achieved by shifting the crop base from sugarcane to a dual crop and introducing a fallow period from March to May or by converting non-productive rangelands to bio fuel production or other agricultural land uses. © 2007 Elsevier B.V. All rights reserved.