Abstract. Water cycle reanalyses, generated by integrating observations into hydrological and land surface models, provide long-term and consistent estimates of key water cycle components. Reanalyses are essential to understand hydrological variability, extreme events such as droughts and floods, and to improve water resource management. Over the past two decades, the assimilation of terrestrial water storage anomaly data from the GRACE and GRACE Follow-On (GRACE/-FO) missions has significantly enhanced these reanalyses, as GRACE/-FO observations uniquely constrain total water storage variability across all terrestrial compartments. Incorporating GRACE/-FO data has led to major advances in representing trends in key hydrological variables, climate-driven changes in the water cycle, and anthropogenic influences such as irrigation-induced groundwater depletion – factors often poorly captured in models. However, challenges remain, particularly in resolving mismatches in spatial and temporal resolution between GRACE/-FO observations and high-resolution models, and there is no consensus yet on the optimal approach for assimilating GRACE/-FO data. In light of the upcoming launches of next-generation gravity missions and the development of increasingly sophisticated Earth system modeling frameworks, it is an opportune time to compile the recommendations of GRACE/-FO data assimilation studies to date, in an attempt to converge to best practices. This review synthesizes past achievements, critically examines unresolved challenges, and explores future directions for advancing water cycle reanalyses using satellite gravimetry observations through improved assimilation strategies, machine learning, and near-real-time intake of satellite data.