Streamflow measurements provide information about the flow generation characteristics of land surfaces as well as the flow transferring nature of the channel network. In this study, such flow transferring properties of the channel network that were obtained from downstream flow observations were used for predicting flow in ungauged basins. A temporally averaged transfer function (ATF) of the channel segments of Kentucky River Basin (KRB) in Kentucky, USA, was extracted from observed hydrographs in a time-invariant system as a function of drainage area. The ATF was regionalized through multiple regression analysis for 194 combinations of drainage areas that differ in topography, terrain, and geology. The application of ATF for flow prediction in ungauged basins was performed for Goose Creek, a subbasin of KRB by integrating ATF with the TOPMODEL. In addition, the ATF was shown to be capable of providing calibration and validation data for ungauged basins in a backward technique from a measured stream gauge downstream, with minimal data requirement of drainage area. The applicability of ATF was illustrated across a range of streamflow conditions from watersheds that varied greatly in their terrain and geology. Nash–Sutcliffe efficiency of the proposed method, as a function of drainage areas of the corresponding basins, to predict daily streamflow from ungauged basins ranged from 0.83 to 0.92. The results of the study concluded that the ATF obtained from measured streamflow thus proved to be a quick and simple tool for assessment of streamflow in both operational and modeling hydrology. Copyright © 2012 John Wiley & Sons, Ltd.