The increasing demands upon groundwater resources due to expanding metropolitan and agricultural areas are a serious challenge, particularly in semiarid and arid regions. In Iran, decades of unrestrained groundwater extraction for domestic, agricultural, and industrial use have resulted in a precipitous depletion of this valuable resource. Here we show that the decline in groundwater levels is associated with land-surface deformation on local and regional scales. Combining water-level data with satellite radar observations provides evidence for the prevalence of compacting aquifers in the country. Groundwater level decline is often associated with destruction of the aquifers, which appears to be a common problem in the groundwater basins of central and northeast Iran. Global warming and future climate change will affect arid and semiarid areas in the coming decades, further augmenting hazards associated with groundwater-induced land subsidence.