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A regional water supply system in Jeju Island, South Korea, comprising 23 wellfields with 5 to 10 groundwater extraction wells (20–100 m spacing), provides water to the residents of the island. Regular large-scale groundwater pumping and excessive extraction in these wellfields have resulted in a decrease in groundwater levels. Using a numerical model, we aimed to assess the effect of large-scale groundwater extraction at four wellfields in Namwon, located in the southeastern part of the island. The numerical model estimated an approximately 0.16–0.21 m decline in water levels, which is consistent with field observations. Minor declines are inherently influenced by the regional hydrogeological setting of the study area, which involves high precipitation rates and a groundwater flow system that facilitates rapid groundwater replenishment. However, the model also shows that the decrease in groundwater levels is expected to intensify to 0.20–0.77 m in cases of extreme drought periods and increasing rates of groundwater pumping. In addition, this study suggests that sufficient well and wellfield separation distances should be considered to prevent well interference effects in areas, such as the western part of the island, with increased decline in water levels due to groundwater extraction.