The Chesapeake Bay is the largest estuary in the United States, and its catchment has heterogeneous hydrological and geomorphologic characteristics. It includes seven major river basins: James, Patuxent, Potomac, Rappahannock, Susquehanna, Western Shore, Eastern Shore, and York. Remote sensing data, along with in-situ observations of streamflow and simulated water budget components, can provide significant understanding of variability in water resources availability in this diverse watershed. In this study, we quantify the terrestrial water storage using both remote sensing and in-situ data and hydrologic model outputs in the Chesapeake Bay watershed. Total water storage change (TWSC) was calculated based on the combination of three methods to identify the best approach in estimating TWSC. These methods evaluated different sources of data, including Parameter elevation Regression on Independent Slopes Model (PRISM) precipitation, MODIS ET, U.S. Geological Survey observed streamflow, and the Variable Infiltration Capacity (VIC) model. Estimated TWSC were in close agreement with GRACE-derived TWSC when we employed VIC-simulated streamflow after calibration with observed streamflow. However, the use of VIC-simulated ET or MODIS-derived ET yielded similar results for TWSC. Assessment of TWSC during extreme events (drought) during the summer months revealed that predicting ET is critical for TWSC in June–August and that VIC-simulated TWSC could be a reliable proxy for GRACE data to assess the water availability in the watershed.