We have developed a prototype time-domain electromagnetic (TEM) sounder to detect groundwater on Mars, with follow-on work oriented toward characterization of aquifers at depths up to several kilometers. TEM is an inductive method in which a large transmitter loop causes eddy currents to flow in the ground, whose magnetic fields are detected by a receiver at the surface. TEM is an artificial-source companion method to natural-source magnetotellurics (MT), to be used where the relevant ambient energy is small. TEM/MT are very sensitive to the thickness, porosity, and salinity of aquifers. TEM/MT are not subject to scattering losses like ground-penetrating radar (GPR) and, unlike GPR, TEM/MT can fully penetrate and characterize even saline aquifers. The principal constraint on TEM is the size of the transmitter loop required to achieve the desired depth of investigation. The Mars-prototype TEM successfully detected basal seawater on Maui at depths up to 250 m using a 76-m diameter loop. With low ambient noise at Mars and the presence of a low-loss cold cryosphere, this system is predicted to be able to detect groundwater at depths up to a few km. Our follow-on work will improve the noise floor of the receiver and test ballistic systems that ultimately would be able to deploy a loop up to hundreds of meters in diameter on Mars, enabling groundwater characterization beyond the reach of any GPR.