The Mu Us Sandyland (MUS) serves as a major base for China's energy and chemical industries. Intensive coal mining, expanding irrigation, and large-scale ecological restoration have increasingly stressed local water resources, yet their individual contributions remain poorly quantified. Here we used a water balance framework integrating Gravity Recovery and Climate Experiment (GRACE) satellite, reanalysis data, and local statistics, to quantify the drivers of changes in terrestrial water storage (TWS) and groundwater storage (GWS) in the MUS from 2003 to 2020. Our results show that TWS and GWS declined at annual rates of 5.5 mm yr-1 and 3.9 mm yr-1 , respectively. Not accounting for coal mass loss leads to overestimations of TWS and GWS declines by 37.2 % and 44.3 %, respectively, underscoring the importance of incorporating coal mass loss into GRACEbased assessments. Attribution analysis indicates that ecological restoration and irrigation jointly account for about 80 % of water loss, with farmland expansion driven by land occupation-compensation policies amplifying irrigation demand. In the energy-intensive zone, mine dewatering was a significant anthropogenic driver of GWS declines (4.1 mm yr-1), with an impact greater than that of irrigation (3 mm yr-1). Future scenario indicate that projected groundwater recharge increases (12.8 %-17.1 %), outpace demand growth (2.2 %-7.6 %) at the regional scale, permitting an additional 13.8 %-18.6 % expansion of ecological restoration. However, spatial heterogeneity means that some sub-areas within the MUS may need a 2.8 %-13.7 % reduction due to supply-demand conflict, while others can expand by up to 19.1 %. These findings provide sector-specific, management-ready insights and underscore the need for integrated land- and water-use planning to support sustainable agricultural water use and ongoing ecological restoration in arid regions.