Satellite observations of terrestrial water storage (TWS) from the Gravity Recovery and Climate Experiment (GRACE) mission have a coarse resolution in time (monthly) and space (roughly 150,000 sq km at midlatitudes) and vertically integrate all water storage components over land, including soil moisture and groundwater. Nonetheless, data assimilation can be used to horizontally downscale and vertically partition GRACE-TWS observations. This presentation illustrates some of the benefits and drawbacks of assimilating TWS observations from GRACE into a land surface model over the continental United States and India. The assimilation scheme yields improved skill metrics for groundwater compared to the no-assimilation simulations. A smaller impact is seen for surface and root-zone soil moisture. Further, GRACE observes TWS depletion associated with anthropogenic groundwater extraction. Results from the assimilation emphasize the importance of representing anthropogenic processes in land surface modeling and data assimilation systems.