From 29 June to 1 July, 2015, a phreatic eruption occurred in Owakudani, the largest fumarole area in Hakone volcano, Japan. In this study, an interferometric synthetic aperture radar (InSAR) time series analysis of the Advanced Land Observing Satellite-2 (ALOS-2)/Phased Array type L-band Synthetic Aperture Radar-2 (PALSAR-2) data was performed to detect posteruptive deflation after the eruption. The results show that the central cones of the volcano have subsided since the eruption and its deflation source is located beneath the previously estimated bell-shaped conductor, which is considered as a sealing layer confining a pressurized hydrothermal reservoir. Therefore, the InSAR results demonstrate the deflation of the hydrothermal system beneath the volcano. One possible cause of this deflation is compaction due to a decrease in pore pressure caused by rupture and fluid migration during and after the eruption.