We assess the water balance of the Brazilian Cerrado based on remotely sensed estimates of precipitation (TRMM), evapotranspiration (MOD16), and terrestrial water storage (GRACE) for the period from 2003 to 2010. Uncertainties for each remotely sensed data set were computed, the budget closure was evaluated using measured discharge data for the three largest river basins in the Cerrado, and the Mann‐Kendall test was used to evaluate temporal trends in the water balance components and measured river discharge. The results indicate an overestimation of discharge data, due mainly to the overestimation of rainfall by TRMM version 6. However, better results were obtained when the new release of TRMM 3B42 v7 was used instead. Our results suggest that there have been (a) significant increases in average annual evapotranspiration over the entire Cerrado of 51 ± 15 mm yr⁻¹, (b) terrestrial water storage increases of 11 ± 6 mm yr⁻¹ in the northeast region of the Brazilian Cerrado, and (c) runoff decreases of 72 ± 11 mm yr⁻¹ in isolated spots and in the western part of the State of Mato Grosso. Although complete water budget closure from remote sensing remains a significant challenge due to uncertainties in the data, it provides a useful way to evaluate trends in major water balance components over large regions, identify dry periods, and assess changes in water balance due to land cover and land use change.