Abstract: This study monitored terrestrial water storage (TWS) anomalies in the Dongting Lake Area from 2003 to 2022 using the spherical harmonic coefficients from the Gravity Recovery and Climate Experiment (GRACE) and GRACE Follow-On satellite missions. A forward modeling approach was integrated with in-situ lake/reservoir storage data and the WaterGAP Global Hydrology Model (WGHM) simulations to disaggregate TWS components (surface water, groundwater, and soil moisture). The spatiotemporal dynamics and driving factors were also analyzed. This study systematically investigated the applicability of GRACE data in small-scale lake-wetland systems and the response relationships between TWS components and climatic factors. Key findings included: (1) Incorporating leakage corrections for observed water storage variations in the Dongting Lake and the Three Gorges Reservoir significantly improved groundwater component separation accuracy. After eliminating 1-month time lag effects, the correlation coefficient between satellite-based and observed groundwater storage anomalies reached 0.71. (2) TWS anomalies were dominated by surface water storage (~66%), followed by groundwater storage (~21%), with weak inter-component exchange. Since 2003, TWS deficit indices identified five moderate-to-severe drought episodes totaling 26 months, with cumulative deficits reaching 3 551 mm. Deficits of different water storage components were quantified, which included soil moisture (1 377 mm), surface water (2 691 mm), and groundwater (1 681 mm). (3) Precipitation anomalies and temperature extremes directly regulated TWS dynamics. Total TWS and surface water responded instantaneously to precipitation anomalies, while soil moisture exhibited 1-month hysteresis. Warming amplified water storage deficits, though groundwater exhibited delayed temperature sensitivity. ENSO emerged as the primary drought driver via monsoon system perturbations induced by equatorial sea surface temperature gradients, showing the strongest correlation with surface water storage deficit index.