We have analyzed 6 years of satellite laser ranging (SLR) data to the Lageos 1 & 2 satellites to determine the annual variation of a set of spherical harmonic coefficients of the Earth's gravity field complete to degree and order 4 (half-wavelength resolution of ~5000 km). We have compared these results to a suite of geophysical models describing annual variations of the gravity field due to changes in the distribution of mass in the atmosphere, in the ocean, and continental hydrology (soil moisture and snow). We find that spherical harmonic coefficients derived from the satellite-observations and the aggregate of these geophysical models agree to about 1 mm RMS in geoid height, and have degree correlations that generally exceed the 90% confidence limit. We found that the SLR data could distinguish between two different hydrologic models, but were unable to distinguish between competing models of atmosphere and ocean mass variation, probably due to the small magnitude of the differences in these models (and the small total magnitude of the ocean signal) at the long wavelengths that can be observed by the satellite data. The satellite results should improve considerably in 2001 with the launch of the Gravity Recovery and Climate Experiment (GRACE), which will allow the determination of the time variations of the Earth's gravity field with a spatial resolution of about 300 km. ¿ 2000 American Geophysical Union