Availability of soil moisture observations at a high spatial and temporal resolution is a prerequisite for various hydrological, agricultural and meteorological applications. In the current study, a novel algorithm for merging soil moisture from active microwave (SAR) and passive microwave is presented. The MAPSM algorithm—Merge Active and Passive microwave Soil Moisture—uses a spatio-temporal approach based on the concept of the Water Change Capacity (WCC) which represents the amplitude and direction of change in the soil moisture at the fine spatial resolution. The algorithm is applied and validated during a period of 3 years spanning from 2010 to 2013 over the Berambadi watershed which is located in a semi-arid tropical region in the Karnataka state of south India. Passive microwave products are provided from ESA Level 2 soil moisture products derived from Soil Moisture and Ocean Salinity (SMOS) satellite (3 days temporal resolution and 40 km nominal spatial resolution). Active microwave are based on soil moisture retrievals from 30 images of RADARSAT-2 data (24 days temporal resolution and 20 m spatial resolution). The results show that MAPSM is able to provide a good estimate of soil moisture at a spatial resolution of 500 m with an RMSE of 0.025 m3/m3 and 0.069 m3/m3 when comparing it to soil moisture from RADARSAT-2 and in-situ measurements, respectively. The use of Sentinel-1 and RISAT products in MAPSM algorithm is envisioned over other areas where high number of revisits is available. This will need an update of the algorithm to take into account the angle sampling and resolution of Sentinel-1 and RISAT data.