With the development of population and economy, the problems of deficit in water resources and degradation in water environment are increasingly serious in the Taihu watershed of China. The information on spatial and temporal availabilities of water will be helpful for the optimum utilization of water resources. In this study, we apply precipitation (P) from the Tropical Rainfall Measuring Mission (TRMM) products, evapotranspiration (ET) derived from MODIS data, and ground-observed runoff. Then annual water budgets in the Taihu watershed from 2005 to 2007 and the variation of water budget components in spatial and temporal (monthly and annually) scales were evaluated. The results indicated that ET was the most notable component of water consumption in the watershed. The annual mean ratio of the ET to the precipitation was 0.73 to 0.89 in the watershed and 1.1 to 1.3 in Lake Taihu area from 2005 to 2007. The analysis of water balance in the watershed indicated that the amount of water input and output were approximately equal for the watershed and the lake areas with imbalance percentages of 1.4% to 4.4% and 0.1% to 4.0%, respectively.