Climate change and anthropogenic activities have intensified extreme weather events globally. In the summer of 2022, the Yangtze River Basin (YRB) in China experienced an extreme drought, significantly impacting the ecosystems and society. However, the specific effects of this extreme drought on surface and subsurface hydrological dynamics remain unclear. Here we employed satellite-observed terrestrial water storage anomaly (TWSA) and a modified hydrological model with consideration of reservoir operation, human water consumption, and water diversion engineering to quantify how subsurface and surface water in YRB responded to such an extreme drought in 2022. Validation against a series of observations shows that the modified model has good performance in reproducing daily streamflow, reservoir water storage, lake water storage, and snow water equivalent. It achieved more precise GRACE TWSA estimates in the YRB with significant human intervention, and therefore it can fairly accurately quantify both surface and subsurface hydrological responses to the 2022 extreme drought. Compared to the same months (July-December) in 2015–2021, the drought in 2022 resulted in a decrease in precipitation and discharge of 373 km3 (36 %) and 324 km3 (50 %), respectively, while an increase in evapotranspiration of 156 km3 (29 %) in the YRB. In general, the surface water storage (SWS) is relatively low from July 2022, followed by subsurface water storage (SSWS) from August 2022, indicating an approximately one-month lag from the former to the latter. During the latter half year of 2022, the SWS and SSWS reduced by 48 km3 and 83 km3, respectively, suggesting the changes in the latter dominated the TWS variations. This study sheds light on the responses of surface and subsurface hydrology to extreme droughts, and the hydrological modeling framework with consideration of human activities proposed here holds applicability beyond the YRB.