Understanding the issues surrounding groundwater governance is a precondition for developing policy recommendations for both national and transboundary groundwater governance. This review discusses groundwater attributes relevant to the design of governance systems and provides a systematic review of current national groundwater governance differentiated by various policy instruments. The synthesis of both resource system characteristics and experience with policy instruments allows us to conceptualize institutional aspects of groundwater governance. This leads to six institutional aspects: (1) voluntary compliance; (2) tradition and mental models; (3) administrative responsibility and bureaucratic inertia; (4) conflict resolution mechanisms; (5) political economy; and (6) information deficits. Each of these issues embodies institutional challenges for national and international policy implementation.