Satellite monitoring of changes in terrestrial water storage provides invaluable information regarding the basin-scale dynamics of hydrological systems where ground-based records are limited. In the Bengal Basin of Bangladesh, we test the ability of satellite measurements under the Gravity Recovery and Climate Experiment (GRACE) to trace both the seasonality and trend in groundwater storage associated with intensive groundwater abstraction for dry-season irrigation and wet-season (monsoonal) recharge. We show that GRACE (CSR, GRGS) datasets of recent (2003 to 2007) groundwater storage changes (ΔGWS) correlate well (r = 0.77 to 0.93, p value < 0.0001) with in situ borehole records from a network of 236 monitoring stations and account for 44% of the total variation in terrestrial water storage (ΔTWS); highest correlation (r = 0.93, p value < 0.0001) and lowest root-mean-square error (<4 cm) are realized using a spherical harmonic product of CSR. Changes in surface water storage estimated from a network of 298 river gauging stations and soil-moisture derived from Land Surface Models explain 22% and 33% of ΔTWS, respectively. Groundwater depletion estimated from borehole hydrographs (−0.52 ± 0.30 km3 yr−1) is within the range of satellite-derived estimates (−0.44 to −2.04 km3 yr−1) that result from uncertainty associated with the simulation of soil moisture (CLM, NOAH, VIC) and GRACE signal-processing techniques. Recent (2003 to 2007) estimates of groundwater depletion are substantially greater than long-term (1985 to 2007) mean (−0.21 ± 0.03 km3 yr−1) and are explained primarily by substantial increases in groundwater abstraction for the dry-season irrigation and public water supplies over the last two decades.