The urban water cycle is an integral part of the hydrologic cycle and is modified directly and indirectly by human activities. These arise from complex interactions taking place in urban areas within a hydrological watershed and beyond. Such modifications impact existing natural processes and components of the hydrologic cycle and create new processes and components. Better understanding and quantitative assessment of the interactions between the urban fabric and the hydrologic cycle and urban groundwater in particular are based on defining connections between hydrological watersheds and urban areas. This includes specifying quantitative impacts of urbanization on the hydrological cycle and on water and groundwater balances. A case study from Bucharest illustrates the impact of urbanization on a lake and highlights the need for urban groundwater balance studies.