Observed hydrological data are usually assumed to be accurate when performing a flood-flow frequency analysis. A great deal of research has been conducted to determine flood frequency under this assumption. However, all flood data are subject to some measurement error and the effect of this error on frequency analysis is not well documented. There are only a few studies which have dealt with this subject and their conclusions are generally inconsistent. Consequently, there is a need for further study in this area. The major emphasis of this study was to demonstrate the effects of measurement error on the results of a flood flow frequency analysis. The Pearson Type III distribution was mainly used in the analysis, although the log-Pearson Type III was also used. To estimate the distribution parameters, the moment method was used as well as the curve-fitting method, which is the prescribed technique for parameter estimation in hydrological frequency analysis in China. Unbiasedness and efficiency of the 100 yr and 1000 yr design event estimates are taken as the major criteria for comparing the goodness of fit in frequency analysis. Results from the Monte Carlo method of generating sequentially synthetic hydrological records indicate that in the absence of historical outliers, the effects of small measurement errors are themselves small and may be neglected. When a historical outlier whose error parameter is smaller than 0.3 is included in the analysis, the resulting frequency curve is improved.