AbstractDistribution and change of freshwater resources is often simulated with global hydrological models. However, owing to process representation limitations and forcing data uncertainties, these model simulations have shortcomings. Combining them with observations via data assimilation, for example, with data from the Gravity Recovery and Climate Experiment (GRACE) mission or streamflow measured at in situ stations is considered to improve the realism of the simulations. We assimilate gridded total water storage anomaly (TWSA) from GRACE into the WaterGAP Global Hydrology Model (WGHM) over the Mississippi River basin via an Ensemble Kalman Filter. Our results agree with previous studies where assimilating GRACE observations nudges TWSA simulations closer to the observations, reducing the root mean square error (RMSE) by 21% compared to an uncalibrated model. However, simulations of streamflow show degeneration at more than 90% of all gauge stations for metrics such as RMSE and correlations; only the annual phase of simulated streamflow improves at half the stations. Therefore, for the first time, we instead assimilated streamflow observations into the WGHM, which improved simulated streamflow at up to nearly 80% of the stations, with normalized RMSE showing improvements of up to 0.1, while TWSA was well‐simulated in all metrics. Combining both approaches, that is, jointly assimilating GRACE‐derived TWSA and streamflow observations, leads to a trade‐off between a good fit of both variables albeit skewed to the GRACE observations. Overall, we speculate that our findings point to limitations of process representation in WGHM hindering consistent flux simulation from the storage history, especially in dry regions.