Tests at 4,778 monitoring sites across China showed a slight increase in polluted sites over last year, from 57.4 percent to 59.6 percent, according to the report, released late Tuesday.
Beijing has been responding to public demands for transparency in environmental data. Last week, the government released a summary of a years-long survey that shows nearly one-fifth of the country's farmland is contaminated, most of it with toxic metals.
Last year, the government also began to release hourly air pollution readings for most Chinese cities.
Excessive use of nitrogen fertilizers on farmland, unfettered industrialization and poor disposal of urban waste have all been blamed for the deterioration in underground water quality.
"It's a direct result of pollution in surface water," said Ma Jun, founder of the non-governmental Institute of Public and Environmental Affairs in Beijing. "Basically the degree of pollution for surface water is directly correlated to that for shallow ground water, while activities such as mining, oil drilling and landfills have caused pollution in deep ground water."
Public concerns about ground water contamination grew last year following reports that a factory in eastern China was pumping its untreated wastewater into the ground. Although local officials denied the reports, citizens demanded more information on ground water.
"The government responded last year with release of some data. This year it released the information proactively, and that's progress," Ma said. "When the public is informed, it will push for cleanup."