This paper outlines the development of a multi-satellite precipitation estimation methodology that draws on techniques from machine learning and morphology to produce high-resolution, short-duration rainfall estimates in an automated fashion. First, cloud systems are identified from geostationary infrared imagery using morphology based watershed segmentation algorithm. Second, a novel pattern recognition technique, growing hierarchical self-organizing map (GHSOM), is used to classify clouds into a number of clusters with hierarchical architecture. Finally, each cloud cluster is associated with co-registered passive microwave rainfall observations through a cumulative histogram matching approach. The network was initially trained using remotely sensed geostationary infrared satellite imagery and hourly ground-radar data in lieu of a dense constellation of polar-orbiting spacecraft such as the proposed global precipitation measurement (GPM) mission. Ground-radar and gauge rainfall measurements were used to evaluate this technique for both warm (June 2004) and cold seasons (December 2004-February 2005) at various temporal (daily and monthly) and spatial (0.04 and 0.25) scales. Significant improvements of estimation accuracy are found classifying the clouds into hierarchical sub-layers rather than a single layer. Furthermore, 2-year (2003-2004) satellite rainfall estimates generated by the current algorithm were compared with gauge-corrected Stage IV radar rainfall at various time scales over continental United States. This study demonstrates the usefulness of the watershed segmentation and the GHSOM in satellite-based rainfall estimations.