Since its launch in 2002, the Gravity Recovery and Climate Experiment (GRACE) has proven to be an invaluable tool to retrieve large scale ocean bottom pressure variations. In this article, we demonstrate that GRACE satellites are able to monitor small scale water mass variations in the Gulf of Thailand. We find that mass related variations dominate sea level in this region. A strong seasonal cycle is detected with an amplitude of approximately 20 cm, peaking in early January. This agrees very well with observations from satellite altimetry and a near-by tide gauge station. The baroclinic Ocean Model for Circulation and Tides, used in the background processing of the GRACE observations, reproduces the temporal behavior of the observations well, but underestimates the power of the signal by about 30%. This demonstrates the added value of the GRACE data and their potential to improve numerical ocean models in certain regions.