Passive microwave remote sensing missions such as Soil Moisture Active Passive (SMAP) are widely used for global soil moisture (SM) estimation. But the low spatial resolution of passive microwave SM products limits their applications at regional and local scales (normally 1–10 km). Using high-resolution auxiliary data to downscale passive microwave SM products is the primary way to obtain high-resolution SM data. However, the existing SM downscaling methods do not entirely account for the scale differences in the impact of various variables on the distribution of SM. To solve this problem, this paper introduced MGWR (Multiscale Geographically Weighted Regression) as a novel way to analyze the scale differences of normalized difference vegetation index (NDVI) and land surface temperature (LST) on the spatial pattern of SM. Accordingly, a new spatial downscaling algorithm for SMAP SM products is proposed and compared with the geographically weighted regression (GWR) algorithm and moving window algorithm (MW). The algorithm was applied to data taken during the SMAP Validation Experiment 2016 (SMAPVEX16), and the downscaled SM evaluated with in situ SM and aircraft observations. These results show that: 1) the SM downscaling conversion function, based on the MGWR, effectively reveals how different surface parameters relate to SM, with LST influencing SM globally and NDVI affecting it locally, 2) compared with GWR and MW, the 1 km SM obtained by the MGWR-based downscaling method showed better spatial agreement with airborne SM in the semiarid region with the ubRMSE decreasing by 0.023 m3/m3 and 0.026 m3/m3 for GWR and MW respectively, 3) when evaluating the 1 km SM with in situ SM in the semiarid region, the SM obtained through MGWR exhibited lower ubRMSE values as compared to both GWR and MW. Specifically, the median ubRMSE values for MGWR, GWR, and MW were 0.043 m3/m3, 0.053 m3/m3, and 0.094 m3/m3, respectively. In conclusion, this study demonstrates that MGWR can effectively improve the accuracy of downscaled SM in semiarid regions.