Abstract: The regular grid digital elevation models (DEMs) with high quality are the premise of calculating slope gradient, aspect, and modeling hydrology accurately. With the input data commonly available and the known characteristics of elevation surfaces, ANUDEM utilizes an iterative finite differential interpolation technique and the drainage enforcement algorithm to remove all sink points in the output DEM that have not been identified as sinks in the input sink coverage and ensure connected drainage structure and sensible representation of ridges and streams. In addition, the output diagnostic files are useful to identify large elevation errors and locations where elevation data and streamline data and then improve the quality of the output DEM. Example of a typical catchments in the Loess Hilly and Gully area, the quality of the DEM, which was produced based on the digital map (1:10000) by ANUDEM, was evaluated in terms of the shade map of the DEM, the derived contours map, streamlines and slope form the DEM. The study shows that the surface of DEM is smooth, the contours and the streamlines form the DEM are matching well to the originals and the slope is correct, so such high quality DEM can represent the shape and drainage structure of the real landform accurately. Therefore, ANUDEM is a good method to produce DEMs with high quality.