Abstract: Over the past few decades, excessive groundwater exploitation has led to a significant decrease in the groundwater level and serious land subsidence in Taiyuan City. In recent years, Taiyuan has vigorously implemented strict groundwater management measures and the project of water diversion into Shanxi from the Yellow River, substantially alleviating groundwater overexploitation and gradually recovering groundwater levels in the city. Therefore, it is necessary to scientifically assess the effect of groundwater level revovery on land subsidence. Based on 2003—2010 synthetic aperture radar (SAR) data from ENVISAT and 2017—2021 SAR data from Sentinel-1, this study extracted the land subsidence information of Taiyuan City of both periods using persistent scatterer interferometric SAR (PS-INSAR). Accordingly, this study compared and analyzed the temporal evolution of land subsidence during the two periods by combining the groundwater extraction volumes, water volumes diverted from the water diversion project, and data on groundwater levels. The results show that the land subsidence in Taiyuan City has been significantly mitigated, with the urban area having shifted from subsidence to uplift. In the Xiaodian area, which underwent the most serious land subsidence, the subsidence area expanded. Nevertheless, the overall land subsidence rate decreased, and the subsidence center has moved southward. The main cause for the slowdown of the land subsidence and even the land uplift in Taiyuan is the continuous groundwater level recovery attributed to the reduced groundwater exploitation and the water diversion project. The results of this study provide a scientific basis for fine-scale land subsidence prevention and groundwater management in Taiyuan City under conditions of groundwater level recovery.