Analysis of seasonal data from the Mars Global Surveyor Thermal Emission Spectrometer (TES) shows a significant increase in thermal inertia during autumn, winter and spring in the middle and high latitudes of Mars. At each stage of the northern seasonal polar cap's recession in spring a distinct high thermal inertia (HTI) annulus arises around the cap's edge. Within this annulus, we estimated and mapped the springtime water ice content in the daily thermal skin depth layer using spring and summer values of the thermal inertia in TES surface footprints. The results show that the average water content in the surface soil within the HTI annulus varies from ∼5 vol % at the early stages of the seasonal polar cap retreating (Ls = 340°–360°) to ∼1 vol % at later stages (Ls = 60°–70°). Maximum values of water ice content within the HTI annulus occur at Ls = 0°–20° (2–6 vol %) and Ls = 20°–40° (4–10 vol %). We analyzed the temporal and spatial relationship between the HTI annuli and the water ice (WI) annuli at the edge of the northern seasonal polar cap. The water ice within the WI annuli was mapped using a water ice spectral index (the absorption band depth at the 1.5 μm wavelength) derived from the OMEGA (Observatoire pour la Minéralogie, l'Eau, les Glaces et l'Activité) imaging spectrometer aboard the Mars Express spacecraft. Recent OMEGA observations show that the WI annuli formation arises only around the retreating northern seasonal polar cap, never around the retreating southern seasonal cap. For this reason our study is confined only to the northern hemisphere. The observed relationship between the HTI and WI annuli in the northern hemisphere of Mars indicates a close physical interdependence between these two phenomena. Our results confirm that the seasonal permafrost exposed by the retreating northern polar cap (within the HTI annuli) is actively involved today in the condensation and sublimation processes in the modern water cycle on Mars. The water abundance in this annual condensation/sublimation cycle within the active layer may be an order of magnitude higher than all the annual water vapor abundance in the Martian atmosphere. Our results are consistent with existence of the positive mass balance of the northern permanent polar cap in the modern climatic period.