The utility of frequency- and space-limited spherical harmonic Slepian basis functions for magnetic anomaly modeling over restricted spherical patches of the Earth was investigated using combined near-surface scalar and CHAMP satellite vector observations from Australia and adjacent marine areas. In particular, Slepian spherical harmonic models up to degree 360 were studied for modeling anomaly features of 1° (~111 km) and longer over a 25°-radius cap centered on Australia. Relative to the roughly 130,000 coefficients required for global spherical harmonic modeling, less than 5% of this number of coefficients is sufficient for effective localized Slepian modeling. Slepian coefficients have maximum power over the spherical cap and may be exploited for estimating the magnetic anomaly vectors and gradients to all orders within the working precision of the observations. The Earth cap modeled by Slepian coefficients is also more efficient in accommodating local crustal constraints from drilling and other geological and geophysical studies for interpreting the associated magnetic anomaly data registered in spherical coordinates. In general, Slepian spherical harmonic modeling is well suited for combining spectrally diverse compilations of near-surface and satellite magnetic observations over any spatially restricted spherical cap of the Earth or other planetary body.