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Clean water from forests is commonly used to supply drinking water to communities both within and outside basin boundaries through inter‐basin transfers (IBTs). Here, we modified the Water Supply Stress Index (WaSSI) model to provide estimates of mean water yield and the proportion of mean flow originating on forested lands at the 12‐Digit Hydrologic Unit Code scale across the conterminous United States (CONUS). We accounted for the benefits of forests for drinking water supply and receiving populations through IBTs by incorporating a new IBT database, surface intake location information for public drinking water systems, and modeled water yield from forests. We compiled the new database of 594 IBTs ranging from 0.01 million m3yr−1to 8,900 million m3yr−1, for a total transferred volume of 116,894 million m3yr−1. According to our results, forested lands comprised 28.7% of the total land area across CONUS, but contributed 46% of the total surface water yield. Approximately 125.5 million people derived more than 10% of their surface drinking water supply from forested lands, and 83.1 million people received more than 50% of their surface drinking water supply from forested lands. Of those 83.1 million people receiving more than 50% of their surface drinking water supply from forested lands, 19.4 million people obtained some (≥0.01%) of that water through IBTs. We conclude that accounting for IBTs is critical to accurately assess the contribution of forested watersheds for surface drinking water supply. Hydrologic models for assessment and decision making must include IBTs to fully account for the effects of climate change and human population dynamics on water resource availability at watershed to regional scales. Results from this study can aid water resource and forest managers in developing integrated watershed management plans at a time when climate change, population growth, and land use change threaten water supplies. National Forest System and other forested lands comprised 28.7% of the total land area but contributed 46.0% of the total water yieldApproximately 125.5 million and 83.1 million people received more than 10% and 50% of their surface drinking water supply from forested lands, respectivelyWithout considering inter‐basin transfer, benefits of forests to water supply would be underestimated National Forest System and other forested lands comprised 28.7% of the total land area but contributed 46.0% of the total water yield Approximately 125.5 million and 83.1 million people received more than 10% and 50% of their surface drinking water supply from forested lands, respectively Without considering inter‐basin transfer, benefits of forests to water supply would be underestimated