Moisture sources and transport processes play a critical part in hydrological cycle and determine regional precipitation. This paper utilizes the Water Accounting Model‐2layers (WAM‐2layers) and the ERA5 reanalysis data to track the sources of precipitation over the Pearl River Basin (PRB). The contribution of external moisture and the role of local recycling are investigated. The results show that during the period from 1980 to 2020, oceanic sources including the western North Pacific and Indian Oceans serve as the primary moisture sources of precipitation over the PRB. The contributions to total seasonal precipitation are respectively 62.57% in MAM, 54.79% in JJA, 43.70% in SON and 60.88% in DJF. By contrast, the contribution of local recycling is generally below 5.50%. In the dry years of 1994, 1997 and 2001, the contribution of terrestrial sources is about 19.22%; in the wet years of 1989, 2009 and 2011, the contribution is about 16.31%. The summer precipitation anomalies are mainly attributable to moisture anomalies from the Equatorial Indian Ocean in the wet years and from Southeast Asia in the dry years. Furthermore, vertically integrated moisture flux anomalies over the boundaries of the PRB are generally the result of anomalous wind rather than anomalous moisture. In the wet years, low‐pressure systems induce strong cyclonic moisture transports, increasing the PRB precipitation. In the dry years, high‐pressure anomalies over the PRB block the moisture transports from the Indian Ocean and western North Pacific.