We present ground deformation measurements in the Taupo Volcanic Zone (TVZ) using differential interferomeric synthetic aperture radar (DInSAR) observations collected by ALOS PALSAR during 2006–2010, and compare them with displacement observations from continuous GPS. We acquired and processed DInSAR images from two ascending paths (324 and 325) and one descending path (628) covering the TVZ, and produced linear deformation rates and time series of deformation. The DInSAR results were improved by using a modified version of the small baseline subset (SBAS) algorithm that simultaneously solves for deformation rates and residual topographic noise. The accuracy of the DInSAR displacement rates along line-of-sight to the satellite is 0.5–2 cm yr−1 depending on the number of SAR images and their coherence. We found good agreement between the DInSAR-derived displacement rates and those measured by continuous GPS for the two ascending paths (correlation 0.94 ± 0.01 and 0.89 ± 0.02); the DInSAR uncertainties were too large to make a useful comparison for the descending path (correlation 0.66 ± 0.03). We identified ground deformation due to groundwater and steam extraction for geothermal power. To demonstrate the geophysical application, we modelled the deformation results using simplified sources for some of the geothermal signals using ellipsoidal and tabular approximations.