In many parts of the world the combined pressures of population growth and a drying climate have resulted in the proliferation of water focused policies which aim to increase the resilience of socio-ecological systems. Until recently, these policies often reflected surface water centric views of water resources, with groundwater receiving scant attention. In this paper we provide an introduction to the importance of groundwater for water-dependent socio-ecological systems and why it needs to be better incorporated into environmental water management policies. Specifically we highlight the key role of groundwater in buffering the environment and socio-economic activities against drought. We also outline some of the key challenges that face policy-makers and managers implementing groundwater management policies. These include dealing with groundwater resources that are spatially and temporally mismatched with surface water resources; transboundary governance issues; challenges between focusing on either preventative or restorative actions and most importantly limited knowledge about groundwater resources and groundwater–ecology relationships. We hope that the information in this paper will assist in the development of sustainable surface-groundwater water management policies, as well as highlight important challenges that should be considered before implementing groundwater related policies.