An approach is proposed to estimate soil moisture from Advanced Microwave Scanning Radiometer for the Earth Observing System (AMSR-E) 6.9 GHz passive microwave observations. The approach was evaluated over two watersheds in the Mackenzie River Basin in northwestern Canada as a contribution to the Canadian Global Energy and Water Cycle Experiment (GEWEX) study and the Mackenzie GEWEX Study (MAGS). Based on the sensitivity of the emitted microwave signal to soil roughness and vegetation parameters, a two-stage method was applied to calibrate a microwave radiative transfer model. Roughness parameters were determined using observations taken under dry conditions. Vegetation parameters were determined using observations taken under wet conditions. Obtained soil roughness and vegetation parameters were then integrated in the radiative transfer model to retrieve soil moisture. The performances of the proposed approach were evaluated against in situ observations, estimates from the NASA soil moisture product (AMSR-E), model-based soil moisture estimates from the NARR and gauge-based precipitation observations. The lowest RMSE of 0.0254 g/cm3 was obtained between the retrieved soil moisture and in situ soil moisture. But, the RMSE between the NARR estimates and in situ soil moisture was 0.055 g/cm3 and between the NASA AMSR-E product and in situ observation was 0.072 g/cm3. This implies that the proposed approach led to an improvement of 55% and 72% in the obtained RMSE over NARR and NASA AMSR-E soil moisture, respectively. It is noteworthy that the proposed approach is expandable to larger watersheds and very appropriate for remote regions like the Mackenzie River Basin where information on roughness and vegetation are scarce.