To improve the accuracy of the areal rainfall estimates over a river basin, the optimal design method of rainfall network was studied using the stochastic characteristics of measured rainfall data. The objective function was constructed with the estimation error of areal rainfall and observation cost of point rainfall and the observation sites with minimum objective function value were selected as the optimal network. As a stochastic variance estimator, kriging model was selected to minimize the error terms. The annual operation cost including the installation cost was considered as the cost terms and an accuracy equivalent parameter was used to combine the error and cost terms. The optimal design method of rainfall network was studied in the Yongdam dam basin whose raingauge numbers need to be enlarged for the optimal rainfall networks of the basin.