Global climate change and anthropogenic activities have significant implications for variations in terrestrial water storage (TWS) across diverse regions. This study aims to understand the factors influencing TWS changes to facilitate the sustainable development of limited freshwater resources, particularly in the Arabian Basin (AB), one of the driest regions in the world. This study incorporated the Gravity Recovery and Climate Experiment (GRACE), Global Land Data Assimilation System (GLDAS), and meteorological dataset. TWS changes and their possible drivers were examined for the AB during the period of 2004-2016. Results indicated a declining trend in TWS at a rate of -0.696 +/- 0.045 cm/year which is primarily influenced by Groundwater (GW). The influence of hydroclimatic variables on TWS variations was significant (p < 0.05) in coastal areas, where the impact of potential evapotranspiration (PET) was more pronounced than precipitation (P). Meanwhile, anthropogenic activities are responsible for TWS decreases in closed basin. The findings of this study could provide valuable guidance for decision-makers, aiding in the implementation of effective water management policies to conserve limited freshwater resources in arid regions.