River impoundments strongly modify the global water cycle and terrestrial water storage (TWS) variability. Given the susceptibility of global water cycle to climate change and anthropogenic influence, the synthesis of science with sustainable reservoir operation strategy is required as part of an integrated approach to water management. Here, we take advantage of new approaches combining state-of-the-art computational models and a novel satellite-based reservoir operation scheme to spatially and temporally decompose Lake Victoria's TWS, which has been dam-controlled since 1954. A ground-based lake bathymetry is merged with a global satellite-based topography to accurately represent absolute water storage, and radar altimetry data is integrated in the hydrodynamic model as a proxy of reservoir operation practices. Compared against an idealized naturalized system (i.e., no anthropogenic impacts) over 2003–2019, reservoir operation shows a significant impact on water elevation, extent, storage and outflow, controlling lake dynamics and TWS. For example, compared to Gravity Recovery and Climate Experiment (GRACE) data, reservoir operation improved correlation and root mean square error of basin-wide TWS simulations by 80% and 54%, respectively. Results also show that lake water storage is 20% higher under dam control and basin-wide surface water storage contributes 64% of TWS variability. As opposed to existing reservoir operation schemes for large-scale models, the proposed model simulates spatially distributed surface water processes and does not require human water demand estimates. Our proposed approaches and findings contribute to the understanding of Lake Victoria's water dynamics and can be further applied to quantify anthropogenic impacts on the global water cycle.