The three dimensional space is represented by Digital Elevation Models (DEMs) in a discrete form. DEM plays an important role in characterizing the topography and to derive the watershed boundaries thereby to study the landscape with in the watershed. Over a decade, DEMs from satellite imageries like ASTER, SRTM, IKONOS, Cartosat etc. are becoming popular with wide applications. However, issue of accuracy of DEMs generated from the satellite imageries is the major concern of remote sensing researcher’s. The main purpose of this study is to compare the accuracy of DEM generated from two different satellite sources, 1) Optical based sensory satellite data – Cartosat-DEM. 2) Microwave based sensory satellite data – SRTM-DEM. The study was conducted over Southpennar watershed which has gradually undulating topography. The comparative study was done under two categories; they are through elevation data and terrain derivatives. The study reveals that in gradually undulating terrain, elevation values of Cartosat-DEM are lower than SRTM-DEM. whereas the stream parameter values of Cartosat-DEM are higher than SRTM-DEM. In visual analysis the contours obtained from Cartosat-DEM and SRTM-DEM aligns with each other irrespective of the resolution.