The 300km long Taupo Volcanic Zone (TVZ) formed as a result of back-arc rifting associated with subduction of the Pacific Plate beneath the Australian Plate, with current extension rates of 8-15mmyr(-1). Using GPS and interferometric synthetic aperture radar (InSAR) data, collected by the European (ESA) and Japanese (JAXA) space agencies, we present ground deformation observations from 2003 to 2011. Both InSAR and vertical GPS data show widespread subsidence across the central TVZ at rates of up to 20mmyr(-1). Using simple elastic dislocation models to represent the contraction of a sill like body at 6km depth, we predict an annual volume change of 0.011-0.016km(3) beneath the central TVZ. We suggest that the majority of the observed subsidence is a result of the cooling and subsequent contraction of magma within the shallow crust.