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Intensive groundwater withdrawals in California have resulted in depletion of streams and aquifers in some regions. Agricultural managed aquifer recharge (Ag‐MAR) initiatives have recently been piloted in California to mitigate the effects of unsustainable groundwater withdrawals. These initiatives rely on capturing wet‐year water and spreading it on large areas of irrigated agricultural lands to enhance recharge to aquifers. While recharge studies typically consider local effects on aquifer storage, few studies have investigated Ag‐MAR benefits and challenges at a regional scale. Here we used the Integrated Water Flow Model, to evaluate how Ag‐MAR projects can affect streamflows, diversions, pumping, and unsaturated zone flows in the southern Central Valley, California. We further tested the sensitivity of three different spatial patterns of Ag‐MAR, each chosen based on different thresholds of soil suitability, on the hydrologic system. This study investigates how the distribution of Ag‐MAR lands benefit the regional groundwater system and other water balance components. The results suggest that Ag‐MAR benefits vary as a function of the location of Ag‐MAR lands. Stream‐aquifer interactions play a crucial factor in determining the ability to increase groundwater storage in overdrafted basins. The results also indicate that Ag‐MAR projects conducted during the November–April recharge season have implications for water rights outside of the Ag‐MAR season. If not properly monitored, Ag‐MAR can cause a rise of groundwater table into the root zone, negatively impacting sensitive crops. Our work also highlights the benefits of using an integrated hydrologic and management model to evaluate Ag‐MAR at a regional scale.