Water storage is an important way to cope with temporal variation in water supply and demand. The storage capacity and the lifetime of water storage reservoirs can be significantly reduced by the inflow of sediments. A global, spatially explicit assessment of reservoir storage loss in conjunction with vulnerability to storage loss has not been done. We estimated the loss in reservoir capacity for a global data set of large reservoirs from 1901 to 2010, using modeled sediment flux data. We use spatially explicit population data sets as a proxy for storage demand and calculate storage capacity for all river basins globally. Simulations suggest that the net reservoir capacity is declining as a result of sedimentation (∼5% compared to the installed capacity). Combined with increasing need for storage, these losses challenge the sustainable management of reservoir operation and water resources management in many regions. River basins that are most vulnerable include those with a strong seasonal flow pattern and high population growth rates such as the major river basins in India and China. Decreasing storage capacity globally suggests that the role of reservoir water storage in offsetting sea-level rise is likely weakening and may be changing sign.