Geoid-quasigeoid separation term is a crucial parameter that allows the conversion between different national height systems based on geoid and quasigeoid surfaces. The consideration of free-air Vertical Gravity Gradient Anomalies (VGGA) in the separation term formula is generally ignored and is not sufficiently investigated. However, this may be important, particularly for the mountainous areas. In this study, the impact of considering modelled VGGA in the special formulation of separation term is investigated. The study area is in mountainous western Turkey where modelled VGGA are previously validated with the homogenous and dense VGGA measurements (in total: 159). The separation term is calculated with and without considering the VGGA. Thus, gravimetric geoid models have been obtained with two different strategies. These gravimetric geoid models are compared with geometric geoid model calculated from recently measured GPS/levelling measurements. The results demonstrate that the consideration of modelled VGGA in the special formula of separation term changes the gravimetric geoid model with the statistics of min: −10.6 cm, max: 17 cm, mean: 0.2 cm, std.: 1.5 cm. This is quite significant for a goal of cm accurate geoid modelling. Especially at elevations higher than 1000 m, the use of modelled VGGA is found to be more effective on the gravimetric geoid.