Deformation of Central Taiwan between 1997 and 2002 was investigated using radar interferometry to construct the deformation rate time series before, during, and after the Chi-Chi earthquake. The deformation rate time series was compared to the time series of groundwater level in the monitoring wells of Yuanlin and Tzushan in order to investigate the relation between the geodetic observations and the groundwater levels. The deformation pattern of Central Taiwan generally forms a half-elliptical pattern, with the eastern half of the elliptical shape cut away by the north-south trending Chelungpu fault. Along a selected profile of 10 km near the Chelungpu Fault of Central Taiwan, the differential range change was measured and recalculated into deformation rates. The year-to-year deformation rates near the Chi-Chi earthquake ranged between 1.5 and 3 cm/year in most years except for the years between 1999 and 2000, which showed more than 5 cm/year deformation rates along the profile. Prior to the high deformation rate shown during the coseismic image pair, the deformation rate was low, as shown on the other image pairs. This variation in deformation rate coincides with the recorded trend in the level of groundwater in two monitoring wells in the Yuanlin area. The low deformation rate prior to the Chi-Chi earthquake may'partially'be explained by this lowering in groundwater level.