Abstract Based on the Helmert condensation and the KTH methods, this paper studies the effect on regional geoid modeling caused by the lateral density perturbation. The simulated research shows that the effect on geoid modelling caused by lateral density variation generally does not exceed one centimeter in plains and less undulating areas; these variations can be ignored within the precision limitation. However, for mountainous areas, this effect reaches to the centimeter or even decimeter level, which should be considered carefully in centimeter-accuracy geoid modelling. These effects show significant variation in mountainous areas; the errors are supposed to exist in the results derived from the Helmert condensation method due to neglecting the outer-zone topographical effects. In total, for regional geoid modeling in mountainous areas, various geoids based on variable crust density should be computed by different approaches, and GPS/leveling data can be used to choose the optimal methodology for geoid modeling in these regions.