This paper examines the impact of DEM resolution on the accuracy of terrain representation and of the gradient determined. The DEMs of three terrain types with diverse complexities were constructed from digitizing contours and then kriging. The accuracy (RMSE) of the DEMs was regressed against contour density (D) and DEM resolution (S) at six resolution levels. It is found that RMSE may be expressed as (7.274 1.666S)D/1000 with an R value of 0.9659. The representation accuracy decreases moderately at an intermediate resolution, but sharply at coarse resolutions for all three terrain types. Resolution reduction profoundly affects the gradient determined from the DEM. While exerting little influence on mean gradient, resolution significantly affects the standard deviation of gradient, especially for a simple terrain. The results obtained in this study may be used to determine the DEM resolution that is appropriate to the accuracy requirements of a particular user.