The main objective of this study is to assess the ability of radar-derived rainfall products in capturing the small-scale spatial variability of rainfall. To perform the assessment, this study uses independent datasets from high-quality dense rain gauge network employed during the TEFLUN-B field experiment in central Florida during the summer of 1998. A detailed comparison between the gauge- and radar-derived spatial variability estimates is carried out by means of covariance functions. The approach followed in the current analysis accounts for the recognized differences in the scales of observation. Results showed a significant discrepancy between the radar- and gauge-derived covariance functions. The radar-derived covariance function is steeper than that obtained using rain gauges, indicating a less spatially correlated field at small separation distances. It is shown that the presence of random errors in the radar-rainfall could be an important cause of discrepancy between the two covariance functions. Results also show that both gauge- and radar-rainfall fields exhibit fractal characteristics, over some distance range, with the same Hurst exponent value.