AbstractThe Yarlung Zangbo River (YZR) is the largest river in the northern Himalayas, providing crucial water resources for downstream. A full understanding of the streamflow dynamics and regional water budget is critical to secure water security of the Himalayan water tower. Here we establish a comprehensive hydrological model to simulate the precipitation‐runoff‐evapotranspiration‐groundwater‐streamflow complex in the YZR basin. We decipher contributions of different water sources (e.g., precipitation, meltwater, groundwater) to YZR's streamflow and estimate that groundwater sustains ∼36% of annual streamflow in the YZR, while precipitation and melt surface runoff contribute 40% and 24%, respectively. Combining modeling, observation and reanalysis data, our results reveal a water “imbalance” that ∼31% of annual precipitation and meltwater (∼333 mm yr−1 or ∼85 km3 yr−1) is unaccounted for in the YZR basin. We propose that the “excess water” discharges to deep fractured bedrock aquifers, which is promoted by widespread permeable active structures (e.g., faults, fractures). This hypothesis is supported by groundwater storage (GWS) estimates where inclusion of the deep groundwater bridges the discrepancy between baseflow‐derived (shallow) GWS and those derived from the Gravity Recovery and Climate Experiment satellite data. The deep groundwater most likely flows across basins, bypasses streams, and finally discharges to downstream aquifers in the Indo‐Gangetic Plain as mountain block recharge. This study not only provides a comprehensive analysis of the streamflow composition in the YZR, but also contributes to shaping a more complete picture of the functionality of the Himalayan water tower, highlighting the importance of groundwater in regional water transfers.