A digital elevation model (DEM) is used to estimate ice-flow velocities for an ice sheet and glaciers via Differential Interferometric Synthetic Aperture Radar (DInSAR) processing. The accuracy of DInSAR-derived displacement estimates depends upon the accuracy of the DEM. Therefore, we used stereo optical images, obtained with a panchromatic remote-sensing instrument for stereo mapping (PRISM) sensor mounted onboard the Advanced Land Observing Satellite (ALOS), to produce a new DEM (“PRISM-DEM”) of part of the coastal region of Lützow–Holm Bay in Dronning Maud Land, East Antarctica. We verified the accuracy of the PRISM-DEM by comparing ellipsoidal heights with those of existing DEMs and values obtained by satellite laser altimetry (ICESat/GLAS) and Global Navigation Satellite System surveying. The accuracy of the PRISM-DEM is estimated to be 2.80 m over ice sheet, 4.86 m over individual glaciers, and 6.63 m over rock outcrops. By comparison, the estimated accuracy of the ASTER-GDEM, widely used in polar regions, is 33.45 m over ice sheet, 14.61 m over glaciers, and 19.95 m over rock outcrops. For displacement measurements made along the radar line-of-sight by DInSAR, in conjunction with ALOS/PALSAR data, the accuracy of the PRISM-DEM and ASTER-GDEM correspond to estimation errors of <6.3 mm and <31.8 mm, respectively.