AbstractGRACE (Gravity Recovery and Climate Experiment) has been widely used to evaluate terrestrial water storage (TWS) and groundwater storage (GWS). However, the coarse‐resolution of GRACE data has limited the ability to identify local vulnerabilities in water storage changes associated with climatic and anthropogenic stressors. This study employs high‐resolution (1 km2) GRACE data generated through machine learning (ML) based statistical downscaling to illuminate TWS and GWS dynamics across twenty sub‐regions in the Indus Basin. Monthly TWS and GWS anomalies obtained from a geographically weighted random forest (RFgw) model maintained good consistency with original GRACE data at the 25 km2 grid scale. The downscaled data at 1 km2 resolution illustrate the spatial heterogeneity of TWS and GWS depletion within each sub‐region. Comparison with in‐situ GWS from 2,200 monitoring wells shows that downscaling of GRACE data significantly improves agreement with in‐situ data, evidenced by higher Kling‐Gupta Efficiency (0.50–0.85) and correlation coefficients (0.60–0.95). Hotspots with the highest TWS and GWS decline rate between 2002 and 2023 were Dehli Doab (−442, −585 mm/year), BIST Doab (−367, −556 mm/year), Rajasthan (−242, −381 mm/year), and BARI (−188, −333 mm/year). Based on a general additive model, 47%–83% of the TWS decline was associated with anthropogenic stressors mainly due to increasing trends of crop sown area, water consumption, and human settlements. The decline rate of TWS and GWS anomalies was lower (i.e., −25 to −75 mm/year) in upstream sub‐regions (e.g., Yogo, Gilgit, Khurmong, Kabul) where climatic factors (downward shortwave radiations, air temperature, and sea surface temperature) explained 72%–91% of TWS/GWS changes. The relative influences of climatic and anthropogenic stressors varied across sub‐regions, underscoring the complex interplay of natural‐human activities in the basin. These findings inform place‐based water resource management in the Indus Basin by advancing the understanding of local vulnerabilities.