The spatial distribution of precipitation is an important aspect of water-related research. The use of different interpolation schemes in the same catchment may cause large differences and deviations from the actual spatial distribution of rainfall. Our study analyzes different methods of spatial rainfall interpolation at annual, daily, and hourly time scales to provide a comprehensive evaluation. An improved regression-based scheme is proposed using principal component regression with residual correction (PCRR) and is compared with inverse distance weighting (IDW) and multiple linear regression (MLR) interpolation methods. In this study, the meso-scale catchment of the Fuhe River in southeastern China was selected as a typical region. Furthermore, a hydrological model HEC-HMS was used to calculate streamflow and to evaluate the impact of rainfall interpolation methods on the results of the hydrological model. Results show that the PCRR method performed better than the other methods tested in the study and can effectively eliminate the interpolation anomalies caused by terrain differences between observation points and surrounding areas. Simulated streamflow showed different characteristics based on the mean, maximum, minimum, and peak flows. The results simulated by PCRR exhibited the lowest streamflow error and highest correlation with measured values at the daily time scale. The application of the PCRR method is found to be promising because it considers multicollinearity among variables.