Water resources are critical to the sustainability of life on Earth. With a growing population and climate change, it is imperative to assess the security of these resources. Over the past five decades, satellite remote sensing has become indispensable in understanding the Earth and atmospheric processes. Satellite sensors have the capability of providing data at global scales, which is economical compared to the ground or airborne sensor acquisitions. The science community made significant advances over recent years with the help of satellite remote sensing. In view of these efforts, the current review aims to present a comprehensive review of the role of remote sensing in assessing water security. This review highlights the role of remote sensing applications to assess water quality, quantity, and hydroclimatic extreme events that play an important role in improving water security. Four water quality parameters, namely, chlorophyll-a, turbidity and Total Suspended Solids (TSS), Secchi Disk Depth (SDD), and Colored Dissolved Organic Matter (CDOM), are considered. Under water quantity assessment, we review three aspects, streamflow estimation, terrestrial water storage, and reservoir operations. Remote sensing applications in quantifying floods and droughts extremes are reviewed in this work. We present how satellite sensor information acquired from different spectral bands, including optical, thermal, and microwave ranges, along with gravity field measurements, have contributed towards the applications in the above areas. We also assess the role of physical models, empirical models, and data assimilation strategies, among others, in the above areas. Finally, possible future research pathways needed to address the issues faced by the science community are discussed. This work is the second of the two-part review series, wherein the first part deals with the applications of satellite remote sensing for agriculture management.