The use of accurate streamflow estimates is widely recognized in the hydrological field. However, due to the model’s structural error, they often yield suboptimal streamflow estimates. Past studies have shown that soil moisture assimilation improves the performance of the hydrological model which often results in enhanced model estimates. Due to this reason, it is widely studied in the hydrological field.  However, the efficiency of the assimilation largely relies on the correct placement of the observation into the model. Ingesting futile observations often results in the degradation of model performance. On the contrary, performing assimilation only at those time steps when the assimilating variable is sensitive to the model output may yield desirable output. Further, it will avoid the assimilation of spurious observations. In this view, this study proposes a new approach where sensitivity-based sequential assimilation is performed on a conceptual Two Parameter Model (TPM). To demonstrate this approach, ASCAT soil moisture observations are assimilated into TPM using Ensemble Kalman Filter (EnKF) sequential approach. At first, the temporal evolution of the soil moisture sensitivity with respect to streamflow is established. Later, at those time steps when the soil moisture is sensitive, EnKF assimilation is performed. For this purpose, a moderately sized catchment in the Krishna basin, India is selected as the study area. Model calibration and validation are performed between 2000 to 2006 and 2007 to 2011 respectively. Model run without assimilation is considered as open-loop simulation. Streamflow simulation after assimilation showed a significant improvement when compared against the open-loop simulation. KGE value increased from 0.70 to 0.79 and PBIAS value reduced from 18.31 to 1.80. The highlighting factor is that only 39% of the total observations were used during the assimilation process. The initial results are encouraging and looks that the proposed approach shall be highly useful at those locations where data availability for assimilation purpose is a serious concern.