Representation of subsurface hydrology in global land surface models has been advanced but outstanding challenges and opportunities remain, especially in better simulating lateral groundwater flow and aquifer pumping for irrigation. This study improves the representation of groundwater in the latest version of the Community Land Model (version 5) by implementing a prognostic groundwater module that accounts for lateral groundwater flow, aquifer pumping, and conjunctive use of groundwater and surface water for irrigation. In particular, we introduce—for the first time—explicit representation of steady-state well equation in large-scale hydrological modeling. Simulations are conducted at ∼5 km resolution over the conterminous US. Groundwater level, terrestrial water storage (TWS), and river discharge are evaluated over the major US aquifers and river basins using in situ observations of groundwater and river discharge and the TWS inferred from the Gravity Recovery and Climate Experiment (GRACE) satellites. The implementation of groundwater pumping results in significant improvements in simulation of spatiotemporal water-level change over the US High Plains and Central Valley Aquifer (CVA) and that of TWS over the CVA. Improvements in river discharge over the major US river basins are also achieved but are not substantial. Furthermore, the representation of pumping leads to certain overestimation in TWS trend compared to GRACE data in regions with high groundwater withdrawals. The consideration of lateral groundwater flow provides improvements in the subsurface response to pumping and natural wet and dry cycles, particularly at the grid cell level. These results provide a basis for improved groundwater modeling over large scales.