The western United States is marked by limited water resources and a fast-growing population. Increasing climate variability as well as a growing demand on water resources highlights the need for improved understanding of connections between regional climate, surface water dynamics, and groundwater recharge. The current study focuses on the linkages between climate variability and groundwater levels in Calleguas Creek watershed located in southern California. The Calleguas Creek groundwater system serves as a critical source of water supply for agricultural and industrial use. Precipitation time series and groundwater levels were analyzed throughout the Calleguas Creek watershed for the period 1975–2004. Water level variability was analyzed for over 311 individual wells with a subset of 20 wells selected for further analysis. A correlation matrix was computed to establish well locations (or groups) with similar hydrologic behavior. Prewhitening methods were used to evaluate the effect of time series autocorrelation on the test statistics for trend detection using the Mann-Kendall test. Both climate and selected groundwater level (well) data were subjected to frequency analysis using fast Fourier transform. The time series of precipitation, the El Niño–Southern Oscillation (ENSO) index, and well levels were analyzed. A strong persistence was observed in the groundwater level time series, ranging from 66% to 99%. Results suggest the existence of significant periodicities between 2.0 and 7.0 years in both the precipitation and the well level data that are partially coincident with ENSO modes. A decadal oscillation was also observed in the well level data, which partially corresponds with the Pacific Decadal Oscillation. Assessment of the complex interactions between climate variability and groundwater levels will facilitate improved water resources planning and management in water-stressed regions where marginal changes in hydrologic budgets have significant implications.