In the Rafsanjan plain, Iran, the excessive use of groundwater for pistachio irrigation since the 1960s has led to a severe water level decline as well as land subsidence. In this study, the advantages of InSAR analyses and groundwater flow modeling are combined to improve the understanding of the subsurface processes causing groundwater-related land subsidence in several areas of the region. For this purpose, a calibration scheme for the numerical groundwater model was developed, which simultaneously accounts for hydraulic aquifer parameters and sediment mechanical properties of land subsidence and thus considers the impact of water release from aquifer compaction. Simulation results of past subsidence are calibrated with satellite-based InSAR data and further compared with leveling measurements. Modeling results show that land subsidence in this area occurs predominantly in areas with fine-grained sediments and is therefore only partly dependent on groundwater level decline. During the modeling period from 1960 to 2020, subsidence rates of up to 21 cm year−1 are simulated. Due to the almost solely inelastic compaction of the aquifer, this has already led to an irreversible aquifer storage capacity loss of 8.8 km3. Simulation results of future development scenarios indicate that although further land subsidence cannot be avoided, subsidence rates and the associated aquifer storage capacity loss can be reduced by up to 50 and 36%, respectively, by 2050 through the implementation of improved irrigation management for the pistachio orchards.