Accurate Digital Elevation Models (DEMs) are essential for precise terrain gravity field calculations, which are critical in gravity field modeling, airborne gravimeter and gradiometer calibration, and geophysical inversion. This study evaluates the accuracy of various satellite DEMs by comparing them with a LiDAR DEM at the Wudalianchi test site, a location requiring ultra-accurate terrain gravity fields. Major DEM error sources, particularly those related to vegetation, were identified and corrected using a least squares method that integrates canopy height, vegetation cover, NDVI, and airborne LiDAR DEM data. The impact of DEM vegetation errors on terrain gravity anomalies and gravity gradients was quantified using a partitioned adaptive gravity forward-modeling method at different measurement heights. The results indicate that the TanDEM-X DEM and AW3D30 DEM exhibit the highest vertical accuracy among the satellite DEMs evaluated in the Wudalianchi area. Vegetation significantly affects DEM accuracy, with vegetation-related errors causing an impact of approximately 0.17 mGal (RMS) on surface gravity anomalies. This effect is more pronounced in densely vegetated and volcanic regions. At 100 m above the surface and at an altitude of 1 km, vegetation height affects gravity anomalies by approximately 0.12 mGal and 0.07 mGal, respectively. Additionally, vegetation height impacts the vertical gravity gradient at 100 m above the surface by approximately 4.20 E (RMS), with errors up to 48.84 E over vegetation covered areas. The findings underscore the critical importance of using DEMs with vegetation errors removed for high-precision terrain gravity and gravity gradient modeling, particularly in applications such as airborne gravimeter and gradiometer calibration.