Ground subsidence is one of the main geological hazards in Shanghai. The ground subsidence is caused by pumping groundwater greatly. In the past, studies of ground subsidence in Shanghai were mostly taken for the ground subsidence caused by pumping confined water in Puxi. And ground subsidence caused by pumping phreatic water was rarely studied. Dewatering preloading is a new technology for soft soil treatment. The monitoring of ground water level, ground subsidence, pore water pressure in the process of dewatering preloading test for a soft soil treatment project in Pudong showed that pumping phreatic water can also cause ground subsidence. The ground subsidence caused by pumping phreatic water was analyzed in this paper. The relationship between phreatic water level and ground subsidence was obtained.