Groundwater is the world's largest accessible source of freshwater to satisfy human water needs. Moreover, groundwater buffers variable precipitation rates over time, thereby effectively sustaining river flows in times of droughts as well as evaporation in areas with shallow water tables. Lateral flows between basins can be a significant part of the basins water budget, but most global-scale hydrological models do not consider surface water-groundwater interactions and do not include a lateral groundwater flow component. In this study we simulate groundwater head fluctuation and groundwater storage changes in both confined and unconfined aquifer systems using a global-scale high-resolution (5 arc-minutes) groundwater model by deriving new estimates of the distribution and thickness of confining layers. Inclusion of confined aquifer systems (estimated 6 % to 20 % of the total aquifer area) changes timing and amplitude of head fluctuations, as well as flow paths and groundwater-surface water interactions rates. Also, timing and magnitude of groundwater head fluctuations are better estimated when confining layers are included. Groundwater flow paths within confining layers are shorter then paths in the underlying aquifer, while flows within the confined aquifer can get disconnected from the local drainage system due to the low conductivity of the confining layer. Lateral groundwater flows between basins are significant in the model, especially for areas with (partially) confined aquifers were long flow paths are simulated crossing catchment boundaries, thereby supporting water budgets of neighboring catchments or aquifer systems. The two-layer transient groundwater model is used to identify hotspots of groundwater depletion resulting in an estimated global groundwater depletion of 6700 km3 over the 1960–2010, consistent with estimates of previous studies.