EURAINSAT is a project co-funded by the European Commission within the activities of the Environment and Sustainable Development sub-programme within the 5th Framework Programme. The key objective of the EURAINSAT project is to set up satellite rainfall estimation algorithms at the space and time scales of the current and next-generation geostationary satellites for an effective real time monitoring of rainfall events. The project is focused on the upcoming Meteosat Second Generation (MSG) and its multispectral Spinning Enhanced Visible and Infrared Imager (SEVIRI). Key aspects of the project involve cloud microphysical characterization using the twelve SEVIRI channels, development of "blended" rainfall algorithms that merge SEVIRI data with microwave-based, low Earth-orbiting data, and data assimilation efforts directed towards improved local area modeling and the forecasting of heavy precipitation events throughout the Mediterranean region. While MSG will not be slated for operational usage until 2002, pre-launch studies and development of "Day-One" algorithms are underway using existing datasets from the operational GOES imager data, the Earth Observational System (EOS) Moderate Resolution Imaging Spectrometer (MODIS), and the Tropical Rainfall Measuring Mission (TRMM) satellite.