In order to effectively recover surface mass or geoid height changes from the gravity recovery and climate experiment (GRACE) time-variable gravity models, spatial smoothing is required to minimize errors from noise. Spatial smoothing, such as Gaussian smoothing, not only reduces the noise but also attenuates the real signals. Here we investigate possible amplitude attenuations and phase changes of seasonal water storage variations in four drainage basins (Amazon, Mississippi, Ganges and Zambezi) using an advanced global land data assimilation system. It appears that Gaussian smoothing significantly affects GRACE-estimated basin-scale seasonal water storage changes, e.g., in the case of 800 km smoothing, annual amplitudes are reduced by about 25-40%, while annual phases are shifted by up to 10°. With these effects restored, GRACE-estimated water storage changes are consistently larger than model estimates, indicating that the land surface model appears to underestimate terrestrial water storage change. Our analysis based on simulation suggests that normalized attenuation effects (from Gaussian smoothing) on seasonal water storage change are relatively insensitive to the magnitude of the true signal. This study provides a numerical approach that can be used to restore seasonal water storage change in the basins from spatially smoothed GRACE data. © Springer-Verlag 2006.