Continuous simulation for design flood estimation is increasingly becoming a viable alternative to traditional event-based methods. The advantage of continuous simulation approaches is that the catchment moisture state prior to the flood-producing rainfall event is implicitly incorporated within the modeling framework, provided the model has been calibrated and validated to produce reasonable simulations. This contrasts with event-based models in which both information about the expected sequence of rainfall and evaporation preceding the flood-producing rainfall event, as well as catchment storage and infiltration properties, are commonly pooled together into a single set of “loss” parameters which require adjustment through the process of calibration. To identify the importance of accounting for antecedent moisture in flood modeling, this paper uses a continuous rainfall-runoff model calibrated to 45 catchments in the Murray-Darling Basin in Australia. Flood peaks derived using the historical daily rainfall record are compared with those derived using resampled daily rainfall, for which the sequencing of wet and dry days preceding the heavy rainfall event is removed. The analysis shows that there is a consistent underestimation of the design flood events when antecedent moisture is not properly simulated, which can be as much as 30% when only 1 or 2 days of antecedent rainfall are considered, compared to 5% when this is extended to 60 days of prior rainfall. These results show that, in general, it is necessary to consider both short-term memory in rainfall associated with synoptic scale dependence, as well as longer-term memory at seasonal or longer time scale variability in order to obtain accurate design flood estimates.