GIS is widely used to support water quantity and quality studies. GIS and digital elevation models (DEMs) can be used to perform watershed delineation to a point or a reach of interest, which is usually one of the first steps in such studies. This paper presents the methodology that preprocesses the DEM in order to facilitate interactive watershed delineation. As a result, watersheds can be delineated quickly and with consistent time response, regardless of the DEM size or the size of the resulting watershed. This methodology is used as a basis for interactive basin development in GIS tools for HMS model support.