Flood mapping from satellites provides large-scale observations of flood events, but cloud obstruction in satellite optical sensors limits its practical usability. In this study, we implemented the Variational Interpolation (VI) algorithm to remove clouds from NASA’s Moderate Resolution Imaging Spectroradiometer (MODIS) Snow-Covered Area (SCA) products. The VI algorithm estimated states of cloud-hindered pixels by constructing three-dimensional space–time surfaces based on assumptions of snow persistence. The resulting cloud-free flood maps, while maintaining the temporal resolution of the original MODIS product, showed an improvement of nearly 70% in average probability of detection (POD) (from 0.29 to 0.49) when validated with flood maps derived from Landsat-8 imagery. The second part of this study utilized the cloud-free flood maps for calibration of a hydrologic model to improve simulation of flood inundation maps. The results demonstrated the utility of the cloud-free maps, as simulated inundation maps had average POD, false alarm ratio (FAR), and Hanssen–Kuipers (HK) skill score of 0.87, 0.49, and 0.84, respectively, compared to POD, FAR, and HK of 0.70, 0.61, and 0.67 when original maps were used for calibration.