Significant land subsidence was recently recognized in northeast Iran, near the city of Mashhad. Precise levelling surveys performed in 1995, 2002 and 2005, indicate as much as 90 cm of subsidence during the 1995–2005 period. Continuous GPS monitoring approximately 8 km northwest of Mashhad City shows more than 20 cm yr−1 subsidence between 2005 and 2006. We use Interferometric Synthetic Aperture Radar (InSAR) measurements to detect the temporal and spatial pattern of this surface deformation. 13 interferograms from 10 C-band SAR images acquired by the Enivsat satellite from 2003 to 2005 are analysed and stacked. Our InSAR mapping suggests that subsidence occurs within a northwest–southeast elongated elliptic-shaped bowl along the axis of the Mashhad valley, with a peak amplitude of ∼28–30 cm yr−1 for the 2003–2005 time period. The InSAR data indicate that approximately 70 km2 in the valley floor, including the northwestern part of Mashhad City, subsided at a rate exceeding 15 cm yr−1 between 2003 and 2005, and that the subsidence area is structurally controlled by the trends of Quaternary faults cutting the valley floor. Analysis of piezometric records suggests that subsidence likely results from extensive overdrafting of the aquifer system in the valley that has caused as much as 65 m of water table decline since 1960s.