This study analyzes the ability of coal mine underground reservoirs to protect groundwater resources. As the demand for coal mining continues to increase, the potential impact on groundwater resources around mines has become a growing problem. Underground water reservoirs, also known as coal mine underground reservoirs, have been constructed as a solution to protect water wastage in mining operations. However, there is a lack of awareness related to the ability of underground water reservoirs in mines to protect groundwater resources. In this study, we used FLAC3D software to analyze the formation process, water storage volume, and central storage location of the underground water reservoir in Zhangshuanglou Coal Mine. The results show that the damaged volume is 3.39 × 106 m3, and the groundwater resources that can be protected by coal mine underground reservoirs in the study area amount to 1.98 × 105 m3. We found that the storage capacity of underground reservoirs is more significantly affected by the extent of mining, which can be expressed as y = 49,056.44 + 255.75x + 1.46x2 (R2 = 0.995) (x ≠ 0). Additionally, the water storage location obtained through simulation can provide a reference for the construction of underground reservoir regulation and water storage projects. The results of the water quality analysis indicate that the concentrations of SO42− decreased by 42% with the closure of the mining area, and the pH also gradually converged to neutral. This highlights the significant role of underground water reservoirs in coal mines in promoting green production and protecting water resources and the environment.